Stock futures retreated Tuesday as nerves rose over a politically fraught meeting between Donald Trump and China's President Xi Jinping later this week.   

S&P 500 futures were down 0.4%, Dow Jones Industrial Average futures fell 0.3%, and Nasdaq futures declined 0.45%. 

The two world leaders are set to meet on Thursday and Friday at Mar-a-Lago in Florida and are expected to discuss North Korea, trade, and currencies. Trump has been highly critical of China, accusing the country of manipulating its currency and stealing U.S. jobs. Trump recently said that if China does not help out in the fight against North Korea, the U.S. will do it on its own, though many argue China is in the unique position of being one of the only countries that could do so. 

"The most negative scenario would see Trump deliver on his campaign rhetoric, slamming a 45% tariff on U.S. imports from China," Michala Marcussen, global head of economics at Societe Generale, wrote in a note. "At the other end of the spectra, China could promise to support Trump's infrastructure plans and thus also job creation in the US ... Our baseline assumption remains that an outright trade war will be averted."

The U.S. trade deficit in February largely erased an increase seen the month earlier. The deficit fell by 9.6% to $43.6 billion in February after jumping 9.6% to $48.5 billion in January. The deficit had hit its highest level in nearly five years in the first month of the year. Imports fell 1.8% in February, while exports increased 0.2%. 

Investors also were looking ahead to a back-loaded week of economic data, particularly the U.S. jobs numbers for March on Friday. It will likely be another month of strength in the U.S. labor market with 174,000 jobs expected to have been added to payrolls. The unemployment rate is estimated to have held at 4.7%, while wages are anticipated to have climbed 0.3%. Other readings on the labor market include the ADP National Employment Report for March -- the unofficial reading on private payrolls ahead of the official U.S. jobs report -- on Wednesday, and weekly jobless claims at their regular time on Thursday.

Investors will also get the rundown of what went on behind closed doors during the Federal Reserve's March meeting when minutes are released on Wednesday afternoon. At that meeting, the central bank decided to raise the federal funds rate by 25 basis points, the third interest rates increase since 2008. The decision was near unanimous with only one dissenter. The Fed also forecast two more rate hikes in 2017, in line with its previous forecasts and as markets have anticipated.

On the economic calendar Tuesday, international trade for February will be released before the bell, while factory orders for February will come out mid-morning. The U.S. trade trade deficit in January rose 9.6% to $48.5 billion, the highest level in nearly five years, and economists anticipate the deficit to narrow to $46 billion in February. 

U.S. handbag maker Kate Spade (KATE)  slumped 12% in premarket trading on reports it will spend a few more weeks negotiating a potential sale of the company after receiving an offer last week from Coach (COH)  . Michael Kors (KORS) also remains interested in Kate Spade, though it hasn't been pursuing an acquisition of the company as actively as rival fashion accessories maker Coach, according to Reuters

Nvidia (NVDA - Get Report) declined 2.8% in premarket trading after Pacific Crest reduced its rating to underweight from sector weight. Analyst Michael McConnell said he grows worried over "lower margins from incremental Nintendo Switch revenue and a possible pause in the company's datacenter business this summer."

Apple (AAPL - Get Report) was slightly lower after Pacific Crest warned of slowing growth ahead. Analyst Andy Hargreaves retained his overweight rating on Apple and raised his price target to $150 from $140, though said further growth would "slow substantially" and that dividend increases and tax reform might be "necessary to drive significant upside." Pacific Crest remains bullish on iPhone unit sales estimates. 

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Goldman upgraded its rating on Mondelez (MDLZ - Get Report) to buy from neutral and added the stock to its "Conviction Buy" list. The firm said snack brands are a "global bright spot."

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