Futures dip as investors turn cautious with G20 in focus

By Amy Caren Daniel

(Reuters) - Wall Street was set to dip at the open on Thursday following a rally led by Federal Reserve Chair Jerome Powell's dovish comments, with investors taking a cautious stance in the run up to the U.S.-China trade talk at the G20 Summit.

In a speech on Wednesday, Powell said the policy rate is now "just below" estimates of a level that neither brakes nor boosts a healthy economy, helping the S&P 500 and the Dow post their biggest percentage gains in eight months.

"The market is taking a bit of a pause after a significant rally yesterday, and are in anticipation of the G20 Summit this week," said Art Hogan, chief market strategist at B. Riley FBR in New York.

 

"It is very difficult to make a prediction as to how the commentary out of G20 might go. When you don't know, you tend to take a risk-off stance."

U.S. President Donald Trump and Chinese President Xi Jinping are due to hold trade talks on the sidelines of the G20 summit in Buenos Aires on Saturday.

Trade-sensitive industrial stocks fell, with Caterpillar Inc down 0.6 percent and 3M Company 0.5 percent.

Chipmakers, which get a large portion of their revenue from China, and shares of U.S.-listed Chinese stocks were also trading lower.

At 8:38 a.m. ET, Dow e-minis were down 22 points, or 0.09 percent. S&P 500 e-minis were down 5.75 points, or 0.21 percent and Nasdaq 100 e-minis were down 26.5 points, or 0.38 percent.

U.S. 10-year Treasury yields fell to 3 percent, its lowest level since mid-September.

Shares of the interest-rate sensitive financial stocks dipped in premarket trading. U.S. lenders JPMorgan Chase & Co, Citigroup Inc, Bank of America Corp and Morgan Stanley fell between 0.3 and 0.7 percent.

Nielsen Holdings Plc gained 5.0 percent after a report that the TV ratings company received buyout interest from a private equity group Madison Dearborn.

McDonald's Corp rose 1.4 percent after brokerage Morgan Stanley upgraded stock to "overweight", saying the fast-food chain's store modernization efforts will pay off in 2019.

Data showed U.S. consumer spending in October increased by the most in seven months, but underlying price pressures slowed, with an inflation measure tracked by the Federal Reserve recording its smallest annual increase since February.

The Federal Open Market Committee is scheduled to release the minutes from its November 7-8 policy meeting at 2:00 p.m. ET (1900 GMT).

(Reporting by Amy Caren Daniel in Bengaluru; Editing by Arun Koyyur)