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U.S. stock futures point to softer open, politics in focus

Published 07/24/2017, 07:09 AM
Updated 07/24/2017, 07:09 AM
© Reuters.  U.S. stock futures point to softer open, politics in focus

© Reuters. U.S. stock futures point to softer open, politics in focus

Investing.com - U.S. stock futures pointed to a lower open on Wall Street on Monday after the International Monetary Fund cut its growth forecast for the U.S. and investors remained perturbed by political upheaval in Washington.

The blue-chip Dow futures was down 2 points, or 0.1% by 07.10 a.m. ET (11.10 a.m. GMT), the S&P 500 futures slipped 3.5 points or 0.14%, while the tech-heavy Nasdaq 100 futures fell 6 points, or 0.1%.

The dip came after stocks finished lower on Friday. For the week, the Dow lost 0.3%, but the S&P 500 and the Nasdaq Composite Index posted gains of 0.5% and 1.2%, respectively.

Risk appetite was hit after the IMF cut its growth forecast for the U.S. this year from 2.3% to 2.1%, while 2018’s forecast was slashed from 2.5% to 2.1% amid the view that U.S. President Donald Trump will struggle to deliver the infrastructure plan he promised.

Political developments remained in the spotlight following reports that President Trump was set make a statement on health care at 3:15 p.m. ET.

An attempt by Republican lawmakers to replace Obamacare collapsed last week, delivering a major policy blow to the Trump administration.

The failure to pass healthcare reform has dampened hopes for the passage of Trump’s other legislative efforts, such as overhauling the tax code and implementing fiscal stimulus.

In currency markets, the dollar was nursing losses near 13-month lows.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.78 after touching 93.65 overnight, its lowest since June 22, 2016.

Hopes for tax reforms and fiscal stimulus under the Trump administration helped drive the dollar to a 14-year high after the November election. The dollar has now given up all of its post-election gains.

Doubts over the Federal Reserve’s plans for a third rate hike this year have also fed into dollar weakness.

The Fed is to hold its next meeting on Wednesday and is widely expected to hold policy steady. Officials may also give some insight into its plans to start normalizing its balance sheet.

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