Investing.com – Wall Street futures pointed to a lower open on Thursday as investors maintained a risk-off stance amid political turmoil on Capitol Hill that forced the biggest drop this year in U.S. stocks a day earlier.
The blue-chip Dow futures slumped 107 points, or 0.52%, at 7:00AM ET (11:00GMT), the S&P 500 futures lost 10 points, or 0.42%, while the tech-heavy Nasdaq 100 futures fell 19 points, or 0.34%.
The Dow and S&P recorded their worst day since September of last year on Wednesday with all the major indices erasing their gains for the month.
The bears looked set to continue the sell off on Thursday as reports surfaced that Michael Flynn and other advisers to Donald Trump’s campaign were in contact with Russian officials and others with Kremlin ties in at least 18 calls and emails during the last seven months of the 2016 presidential race.
That was only the latest worry in a tumultuous week at the White House, which included allegations that the president tried to interfere with a federal investigation and shared classified information with Russia's foreign minister.
The Justice Department on Wednesday appointed former FBI director Robert Mueller as special counsel to take over the investigation of Russia's alleged interference in the U.S. presidential election.
The recent string of controversies intensified doubts that Trump would be able to follow through on his campaign promises for tax cuts, deregulation and fiscal stimulus which had underpinned equities and the U.S. dollar.
Despite the continuation of the sell-off in stocks, the dollar managed to recover slightly on Thursday after its worst losses in almost a year against the yen and the euro as worries over the Trump presidency weighed.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.05% to 97.39 by 7:01AM ET (11:01GMT) after having hit an overnight low of 97.28, levels last seen in the immediate aftermath of Trump's surprise victory in November.
The controversies surrounding the helm of the world’s largest economy were considered to up the ante for the Federal Reserve (Fed) to be able to move forward with plans to remove accommodative policy.
According to Investing.com’s Fed Rate Monitor Tool, odds for the first rate hike to arrive in June had tumbled from more than 80% last week to around just 57% on Thursday.
Among economic reports out on Thursday, weekly jobless claims and the Philadelphia Fed survey for May will both be released at 8:30AM ET (12:30GMT).
In company news, Cisco Systems (NASDAQ:CSCO) tumbled 7% in pre-market trade after the tech giant released a disappointing outlook in its earnings report after Wednesday’s market close.
On the upside, L Brands (NYSE:LB) had risen 7% in after hours trading after the owner of Victoria’s Secret released solid profit and gave a strong forward guidance.
Still on tap for Thursday, Wal-Mart (NYSE:WMT), Alibaba (NYSE:BABA) and Ralph Lauren (NYSE:RL) were among companies set to release numbers before the opening bell, while Autodesk (NASDAQ:ADSK), Gap (NYSE:GPS) and Salesforce.com (NYSE:CRM) will report after the close.
Meanwhile, oil prices tumbled more than 1% on Thursday, as the market weighed rising U.S. shale production against ongoing efforts by major producers to cut output to reduce a global glut.
Underlining OPEC’s difficulties in other producers filling the gaps left by their output cut agreement, U.K. conservatives reportedly pledged to develop the British shale industry in an election manifesto.
U.S. crude futures fell 1.75% to $48.21 by 7:02AM ET (11:02GMT), while Brent oil lost 1.78% to $51.28.
Elsewhere, global stock markets were under pressure for a second consecutive session on Thursday, amid concerns over the scope of an investigation of U.S. President Donald Trump's ties to Russia.
Most Asian indexes closed in negative territory, with Japan's Nikkei ending down around 1.3%, while China's Shanghai Composite shed about 0.5%.
In Europe, stocks across the continent suffered for the second day in a row, with Germany's DAX down around 0.8% by 7:16AM ET (11:16GMT), while London's FTSE 100 slumped 1.2%.
The British benchmark was under particular pressure based on a stronger pound, which makes overseas earnings weaker when traded back into sterling. A positive read on U.K. retail sales released Thursday pushed cable above 1.30 for the first time since September last year.