* Sears, Dollar Tree, Dollar General slump after results
* SoftBank to invest in GM’s autonomous vehicle unit
* Futures up: Dow 6 pts, S&P 1 pt, Nasdaq 7 pts (Adds comment, adds details, updates prices)
By Medha Singh
May 31 (Reuters) - Wall Street was set to open flat on Thursday as optimism over renewed efforts in Italy to form a government were countered by worries of a looming trade war with the European Union.
Washington is set to announce plans to slap tariffs on EU steel and aluminum imports as early as Thursday morning, sources said, while the U.S. commerce secretary said any escalation of their trade dispute would depend on the bloc’s reaction.
Shares of Steel Dynamics, AK Steel and US Steel gained between 3.3 percent and 4.4 percent and aluminum maker Alcoa rose 2.3 percent in premarket trading.
Another big gainer was General Motors, which surged 11.3 percent after Japan’s SoftBank Group decided to invest $2.25 billion in its autonomous vehicle unit.
Friction between the United States and its trading partners have roiled financial markets, especially after U.S. President Donald Trump in March decided to impose 25 percent tariff on steel imports and a 10 percent tariff on aluminum.
“If it (tariffs) happens, eventually that could be a problem because we have to see retaliation. For now, it’s already in the markets,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“Basically there is a sense of relief that Italian situation is not going to lead to a major euro crisis.”
Markets rebounded on Wednesday, with the S&P 500 recovering its losses from the previous session, helped by renewed efforts to form a government and avoid new elections.
At 8:56 a.m. ET, Dow e-minis were up 6 points, or 0.02 percent. S&P 500 e-minis were up 1 points, or 0.04 percent and Nasdaq 100 e-minis were up 7 points, or 0.1 percent.
Data showed that U.S. consumer spending jumped 0.6 percent in April, the biggest gain in five months and above Reuters’ estimate of 0.4 percent rise, in the latest sign that economic growth was regaining momentum early in the second quarter.
Personal consumption expenditures (PCE), the Federal Reserve’s favored measure of inflation which excludes the volatile food and energy components, rose 0.2 percent in April.
That left the year-on-year increase in the so-called core PCE price index at 1.8 percent, below the central bank’s 2 percent target.
Among other stocks, Micron slipped 2.9 percent after Morgan Stanley downgraded the stock to “equal-weight”.
Struggling department store operator Sears Holdings slid 7.2 percent after its quarterly profit slumped nearly 30 percent.
Dollar General declined about 7 percent and Dollar General dropped 8.3 percent after both discount retailers missed Wall Street estimates for their quarterly same-store sales. (Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)