After clocking their biggest weekly loss of the year last week, US stocks are poised to open sharply lower on Monday — with the Dow on track for its longest losing streak since 2011 — on investor doubts over President Donald Trump’s ability to deliver on his campaign promises.
S&P 500 futures were 0.9 per cent lower at 2,324.75 after the benchmark index logged its steepest weekly drop since November last week. Meanwhile Dow futures were down 0.7 per cent to 20,436.00 and Nasdaq futures were down 0.8 per cent to 5,337.00.
The risk-off sentiment continued from Friday when House Republicans canceled a vote on healthcare reform that was intended to repeal and replace Obamacare. While Mr Trump has said he is preparing to move on to tax reform — the next item on his policy agenda — the bruising failure to raise enough support from within his own party has investors concerned that he may not be able to deliver on his economic agenda and helped drive global stocks lower.
The so-called Trump Trade that has seen US stocks push deeper into record territory since the election on hopes that the new administration’s promised tax reform and stimulus plans could boost economic growth appears to have taken a sharp hit.
Indeed, the US dollar has given up most of its post-elections gains. The dollar index, a measure of the buck against a basket of peers, was down 0.5 per cent on Monday and is at its lowest level since November 11.
Meanwhile, following a global market sell-off investors sought the safety of haven assets. The yield on the US 10-year Treasury, which moves inversely to price, was down 4.3 basis points to 2.369 per cent. And spot gold prices were up 1.1 per cent to $1,257.00 a troy ounce.