US pre-open: Stocks seen lower amid rate hike expectations

US futures pointed to another downbeat session on Wall Street amid growing expectations the Federal Reserve might hike interest rates at its next policy meeting.

At 1210 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.6%, while Nasdaq futures were off 0.8%.

At the same time, oil prices were on the back foot. West Texas Intermediate was down 1.9% at $45.03 a barrel and Brent crude was 1.7% weaker at $47.20.

Comments by Boston Fed President Eric Rosengren on Friday sparked worries that the US central Bank will raise rates, after he said the economy has been more resilient to exogenous risks and that gradual tightening was likely to be appropriate.

With this in mind, investors will be eyeing more comments from Fed officials, with Fed governors Lockhart and Brainard both due to speak later on Monday. Tuesday will mark the beginning of the traditional ‘quiet period’ before the Fed’s policy meeting on 20-21 September.

CMC Markets’ Jasper Lawler said: “US stocks look set for a lower start with the Dow Jones set continue Friday’s rout with a triple digit drop. Investors are likely in a state of unease in the run-up to the hastily-arranged speech from the Fed’s Lael Brainard.

“The risk is that Ms Brainard goes from dove to hawk and signals a rate hike on the last day before the Fed begins its pre-meeting quiet period.”

Meanwhile, Rebecca O’Keeffe, head of investment at Interactive Investor, said: “The major hope for investors rests with the Fed's resident dove, Lael Brainard, whose speech today takes on even more significance, amid hopes that she will maintain her dovish stance and ease market fears for next week's Federal Reserve meeting.”

On the corporate front, HP Inc shares were down 1% in pre-market trade after it said it had agreed to buy Samsung Electronics Co’s printer business in a deal valued at $1.05bn.

Elsewhere, Raptor Pharmaceutical was likely to be in focus after it agreed to be bought by Horizon Pharma in a deal valued at $800m.

Praxair was in the red after it ended talks with German industrial gas company Linde about a possible merger.