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U.S. stock futures slump on hawkish Fed outlook, Trump investigation

Published 15/06/2017, 11:44
Updated 15/06/2017, 11:55
© Reuters.  U.S. stock futures slump

Investing.com - U.S. stock futures pointed to a negative open on Thursday morning, as investors continued to digest the Federal Reserve's hawkish message.

Deepening political turmoil in Washington also weighed on risk sentiment, with the Washington Post reporting that U.S. President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.

The blue-chip Dow futures dropped 94 points, or about 0.5%, by 6:40AM ET (1040GMT), the S&P 500 futures lost 17 points, or around 0.7%, while the tech-heavy Nasdaq 100 futures slid 67 points, or roughly 1.2%.

A slide in technology stocks pulled down the Nasdaq Composite on Wednesday and the S&P 500 ended slightly lower, while financials buoyed the Dow.

The Fed raised interest rates for the second time this year at the conclusion of its policy meeting on Wednesday, putting it in a range between 1.0%-1.25%. The central bank maintained its outlook of one more rate hike for this year, as it expects that a tightening labor market will lift inflation to the 2% target over the medium term.

The Fed also provided greater details on how it plans to reduce its massive $4.5 trillion balance sheet.

Meanwhile, market players continued to monitor political turmoil in the U.S. after the Washington Post reported that President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.

People familiar with the matter told the Post that the obstruction of justice probe started in the wake of Trump's firing of former FBI Director James Comey.

Attention now turns to a raft of U.S. economic data scheduled for Thursday morning. Weekly jobless claims and import prices are due at 8:30AM ET (1230GMT).

Both the Philadelphia Fed survey and Empire State manufacturing survey are also released at 8:30AM ET. There is industrial production at 9:15AM ET (1315GMT) and the National Association of Home Builders survey at 10AM ET (1400GMT).

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.4% at 97.27 in New York morning trade, moving away from the previous session’s seven-month low of 96.31.

Among active pre-market movers, big name tech stocks were poised to slump for the second time this week, with shares of the top-five tech leaders, Facebook (NASDAQ:FB), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT) and Google parent Alphabet (NASDAQ:GOOGL), all in the red.

Tech darlings like Netflix (NASDAQ:NFLX), NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) were also among the biggest losers in pre-market action.

In other markets, European stocks dropped to their lowest in nearly two months, as investors digested comments from the Federal Reserve and waited to hear from the Bank of England. Earlier, in Asia, equities closed mostly lower.

Elsewhere, oil prices remained below the $45-per-barrel level as data showing U.S crude stockpiles shrank by less than anticipated and gasoline inventories increased unexpectedly last week underlined fears over a global supply glut.

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