BENGALURU: US stock index futures were lower on Wednesday as investors appeared to be in a risk-off mode a day after President Donald Trump said he will shutdown the US government if necessary to build a wall along the border with Mexico.
“If we have to close down our government, we’re building that wall,” Trump said at a rally in Phoenix, Arizona, in reference to his pledge to tighten immigration controls at the US-Mexican border.
Trump also said he might scrap the North American Free Trade Agreement with Mexico and Canada. The three countries are aiming to complete modernising the 23-year-old agreement by early 2018.
Investors have grown increasingly concerned about Trump’s ability to legislate his pro-growth agenda, especially those of tax cuts and infrastructure spending, given the near constant political rumblings in the White House.
Trump’s comments on Tuesday evening took the wind out of the sail of US stocks, which had enjoyed their best one-day percentage gains in over a week as lawmakers’ comments on tax reform and the debt ceiling boosted investor optimism.
US House Speaker Paul Ryan, earlier on Tuesday, had indicated that tax reform would be easier to pass than the failed health care overhaul as Republicans had built a consensus.
Investors are also jittery ahead of the annual gathering of global central bankers in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen’s Friday speech will be scrutinised for clues on the central bank’s stand on monetary policy.
Dallas Fed Chief Robert Kaplan is expected to speak at an event later in the day. Kaplan, part of the Fed’s cautious camp, has said the central bank should be “very patient and judicious” as it considers whether to raise interest rates.
Economic data due includes a report on new US single-family monthly home sales, which are expected to have increased for a third straight month in July, but at a slower pace than in June. The data is expected at 10:00am ET (1400 GMT) Among stocks, Lowe’s dropped 6.3 per cent to $71.06 in premarket trading after reporting a lower-than-expected profit and slashing its margins forecast. Home Depot was off 0.77 per cent.
Salesforce was off 1.20 per cent at $91.83 as its strong growth in quarterly revenue failed to satisfy some investors.
Futures snapshot at 7:00am. ET: Dow e-minis were down 33 points, or 0.15 per cent, with 22,725 contracts changing hands.
S&P 500 e-minis were down 5.25 points, or 0.21 per cent, with 137,759 contracts traded.
Nasdaq 100 e-minis were down 12.75 points, or 0.22 per cent, on volume of 20,570 contracts.
