By Yashaswini Swamynathan and Abhiram Nandakumar
REUTERS – Wall Street was set to open lower on Tuesday as the outlook for U.S. interest rates remained cloudy and oil hovered near one-month lows.
Crude dipped after data showed U.S. gasoline demand unexpectedly fell in January and skepticism about top producers reaching a deal to reduce a global glut increased.
Gold, a traditional safe-haven, rose more than 1 percent.
Adding to the downbeat sentiment were comments by Presidents of the Chicago and Boston Federal Reserves on Monday, supporting an aggressive stance on monetary policy.
Their comments were in contrast with Fed Chair Janet Yellen’s cautious tone on rates last week, citing a shaky global economy and low oil prices.
Traders have priced in only one hike in 2016, with an even chance of the central bank raising rates in June, according to the CME Group’s FedWatch program.
A barrage of recent data has shown that the U.S. economy is recovering at a modest pace, but remains vulnerable to risks from a weak global economy.
International Monetary Fund Managing Director Christine Lagarde warned on Tuesday of increasing risks to global economic growth unless there were stronger measures by policymakers.
“We’re feeling some of the same macro factors to a lesser degree, but there’s a knockdown effect that if Europe is slowing down, that doesn’t necessarily bode well for us,” said Steven Baffico, chief executive at Four Wood Capital in New York.
Data on Tuesday showed that the U.S. trade deficit widened to $ 47.1 billion in February, more than the $ 46.2 billion estimated.
The Institute for Supply Management’s index of non-manufacturing activity likely rose to 54 in March, from 53.4 in February, a report at 10 a.m. ET (1400 GMT) is expected to show.
At 8:22 a.m. ET, Dow e-minis were down 112 points, or 0.63 percent, with 34,100 contracts changing hands. S&P 500 e-minis were down 15.5 points, or 0.75 percent, with 311,482 contracts traded. Nasdaq 100 e-minis were down 29.75 points, or 0.66 percent, on volume of 34,931 contracts.
Wall Street closed lower on Monday, pausing from a recent rally, as losses in commodity-related and industrial shares offset gains in healthcare.
Allergan shares fell 19.3 percent to $ 224 premarket as the U.S. Treasury unveiled rules to curb tax inversion deals, potentially derailing the drugmaker’s merger with Pfizer. Pfizer was up 2.2 percent at $ 31.40.
Disney slipped 2.2 percent to $ 96.50 after the media company said a veteran executive, who was tipped to be its next CEO, would step down.
Twitter was up 2.1 percent at $ 17.45 after Bloomberg reported that the social media company had won the rights to broadcast National Football League games online.
(Reporting by Yashaswini Swamynathan and Abhiram Nandakumar in Bengaluru; Editing by Anil D’Silva)
