Wall St poised for higher open as markets eye data, policy changes

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U.S. Steel drops after Biden halts Nippon Steel’s takeover plan

Liquor stocks fall after US surgeon general’s warning

Dec. ISM Manufacturing data awaited

Futures up: Dow 0.33%, S&P 500 0.37%, Nasdaq 0.48%

(Updates to before markets open)

By Johann M Cherian and Pranav Kashyap

Jan 3 (Reuters) – Wall Street’s main indexes were poised to open higher on Friday, as investors kept a close eye on upcoming economic data and geared up for potential policy shifts under the incoming Trump administration.

At 08:34 a.m. ET, Dow E-minis were up 140 points, or 0.33%, S&P 500 E-minis were up 21.75 points, or 0.37% and Nasdaq 100 E-minis were up 101 points, or 0.48%.

Wall Street had a rocky start to the new year, with all three major indexes shedding early gains to close lower for the fourth consecutive session on Thursday. The downturn defied a historical trend where markets typically rally during the last five sessions of December and the first two sessions of January.

The benchmark S&P 500 and blue-chip Dow are on track for weekly declines of over 1% each, while the tech-heavy Nasdaq has logged a drop of about 2%. Technology stocks that have led much of the rally over the past two years took the heaviest beating.

Analysts have highlighted uncertainty surrounding the policies that President-elect Donald Trump’s administration might roll out, especially with his Republican party holding sway over Congress. The newly elected Congress will begin its first session on Friday, with Trump set to take the oath of office on Jan. 20.

Trump’s proposals, ranging from slashing corporate taxes and easing regulations to imposing tariffs and curbing illegal immigration, could boost corporate profits and energize the economy. However, they also pose certain risks.

“It’s a complicated picture. At first, investors were thinking back in November that (election results) is a wonderful thing because it is a clear market friendly result,” said Peter Andersen, founder of Andersen Capital Management.

“The main issue people will start focusing on is, if his decisions will be inflationary and if they are, does that signal that the Fed will do an abrupt course change and start raising rates.”

Traders now expect the Federal Reserve to lower rates by about 50 basis points this year, per the CME Group’s FedWatch Tool.

Meanwhile, the yield on the 10-year Treasury note remains anchored near the psychological level of 4.5%.

Inflows into U.S. equity funds experienced a sharp decline in the week leading up to Jan. 1.

Later in the day, markets will parse ISM’s report on manufacturing activity for December, ahead of a key employment figure due next week.

Comments from Richmond Fed President Thomas Barkin are also on tap.

Stretched equity valuations have been a concern for investors but most brokerages expect another year of gains for U.S. stocks, propelled by strong corporate performance.

In premarket trade, alcoholic beverage makers such as Constellation Brands, Molson Coors, and Brown-Forman slipped more than 1%, after the U.S. surgeon general urged cancer warnings for alcoholic drinks.

U.S. Steel slid 8% after President Joe Biden blocked Nippon Steel’s proposed $14.9 billion purchase of the company.

Block rose 3.1% after brokerage Raymond James raised its rating to “outperform” from “market perform”.

Trading volumes are expected to be subdued following the New Year’s holiday on Wednesday.

(Reporting by Johann M Cherian and Pranav Kashyap in Bengaluru; Editing by Devika Syamnath)