US pre-open: Stocks seen lower after Fed minutes as investors eye Trump-Xi meeting

US futures pointed to another weaker session on Wall Street on Thursday as investors grappled with news that the Federal Reserve will start unwinding its balance sheet this year, and ahead of a key meeting between Donald Trump and Chinese President Xi Jinping.

Investors were also likely to be wary ahead of Friday's all-important non-farm payrolls report.

At 1050 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were down 0.1%.

IG analyst Chris Beauchamp said: "US markets will continue to digest the Fed minutes, as well as comments from speaker Ryan that hint at a further delay to tax reform. In addition, the meeting between Trump and Xi provides the opportunity for fresh worrying, although expectations are so low that anything short of a PR disaster will be gratefully received. And then we still have non-farm payrolls tomorrow to contend with. Ahead of the open, we expect the Dow to start at 20,611, 37 points lower from yesterday’s close."

Trump is due to meet with Chinese President Xi Jinping in Florida later on Thursday for a two-day summit.

Stocks closed in the red on Wednesday after the latest Federal Reserve minutes revealed the central bank was ready to start cutting its balance sheet before the end of the year.

The minutes from the March meeting, during which officials approved a quarter-point interest rate hike, revealed that the Fed plans to start shedding the $4.5trn in bonds it is holding on its balance sheet.

The minutes stated that the reductions should be “gradual and predictable” through the “phasing out” of reinvestments, meaning the Fed won't just stop repurchasing all debt instruments when they mature.

Stocks in the US were also weighed down by comments from House Speaker Paul Ryan who told an audience in Washington that tax reform will take longer to accomplish than repealing and replacing Obamacare.

"The House has a (tax reform) plan but the Senate doesn't quite have one yet. They're working on one. The White House hasn't nailed it down," Ryan said.

In corporate news, WhiteWave Foods could be active after France's Danone said it got court approval for its $10.4bn acquisition of the company.

Elsewhere, CarMax and Constellation Brands were among the companies due to report earnings before the opening bell.

On the data front, investors will eye the release of initial jobless claims at 1330 BST.