– Wall Street futures pointed to a flat to lower open on Thursday as investors took a break from prior gains on the back of the tax reform proposal and looked ahead to the second revision of U.S. gross domestic product and labor market data.
The blue-chip Dow futures edged down 20 points, or 0.09% by 7:06AM ET (11:06GMT), the S&P 500 futures dropped 2 points, or 0.08%, while the tech-heavy Nasdaq 100 futures gave up 7 points, or 0.11%.
U.S. President Donald Trump’s long-awaited tax reform plan supported gains on Tuesday as the framework proposed bringing the corporate tax rate to 20% from 35% as expected.
Despite market optimism, the proposal still faces an uphill battle in Congress, with the Republican party divided over it and Democrats hostile.
“Without sufficient details on how or even if these tax cuts will be fully paid for, this outline is nothing more than a fiscal fantasy,” the Committee for a Responsible Federal Budget noted.
ING economists noted that “the release hasn ’t added to what we already knew.”
“What was meant to be a ‘very comprehensive report ’ was thin on the key details that US markets crave to make any meaningful assessment of the likelihood of a Trump tax plan being successfully signed into law and its overall economic impact,” they explained.
Not unlike U.S. equities, the dollar was also giving back gains on Thursday as market participants assessed the tax plan.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.18% to 93.10 at 7:07AM ET (11:07GMT), turning around Thursday from a high of 93.50 hit earlier, its strongest level since August 23.
U.S. bond yields were still on the rise, though paring earlier gains on Thursdya, with the yield on two-year notes pulling back from a nine-year high of nearly 1.5%, while the 10-year yield also backed off its highest level, near 2.36%, in more than two months.
These market moves occurred Thursday as investors looked ahead to final figures on U.S. second-quarter economic growth at 8:30AM ET (12:30GMT). The data is expected to show that the economy grew at a 3.0% annual rate in the April-June quarter, improving sharply from growth of 1.4% in the first quarter.
At the same time, weekly data on initial jobless claims will also be released.
On the central bank front, Boston Fed president Eric Rosengren argued for a “regular and gradual” increase in interest rates.
Later on Thursday, comments from soon-to-depart Fed vice chairman Stanley Fischer at 10:15AM ET (14:15GMT) will garner some attention. Kansas City Fed President Esther George and Atlanta Fed chief Raphael Bostic are also on the agenda.
Meanwhile, oil prices moved higher on Thursday, with the U.S. benchmark roaring back into bull market territory on continued hopes that the market is starting to rebalance.
With no apparent news in the pipeline, some traders suggested that earlier losses were erased when algorithmic buy programs kicked in when prices hit the $51.90 level.
U.S. crude futures gained 1.00% to $52.56 by 7:07AM ET (11:07GMT), while Brent oil traded up 0.57% to $57.90.