US pre-open: Stocks seen lower, dollar drops on Trump doubts

US futures pointed to weaker open on Wall Street as doubts grew about Donald Trump's ability to deliver on his pledges to cut taxes and boost infrastructure spending after Republican leaders withdrew his healthcare bill last week due to a lack of support.

At 1100 GMT, Dow Jones Industrial Average futures were down 0.7%, while S&P 500 and Nasdaq futures were 0.8% lower.

Meanwhile, the dollar was under pressure across the board after the failed passage of the healthcare bill. The greenback was down 0.9% against the pound to 0.7945, 0.7% weaker versus the euro at 0.9197 and 0.9% lower against the yen at 110.29.

RBC Capital Markets said initial optimism that a pivot to tax reform would support the US dollar gave way to the realisation that “very big” tax cuts were highly dependent on the savings from replacing Obamacare.

Oil prices slipped back after an unscheduled OPEC meeting over the weekend, where the cartel of major producers announced that they would stick to their plan to reduce production and said cuts could be extended up to six months. West Texas Intermediate was down 0.7% to $47.63 a barrel and Brent crude was off 0.5% to $50.57.

Craig Erlam, senior market analyst at Oanda, said: "In much the same way that equities, the dollar and US yields rallied after Donald Trump’s election victory on the promise of bold growth friendly policies, the opposite is being seen this morning after the President failed to convince Congress to get behind what should have been a more straight forward attempt to repeal and replace Obamacare.

"Trump may have pledged to move on to market friendly tax reforms if the bill failed late last week in an attempt to put further pressure on officials and avoid disappointing markets too much, investors are still a little concerned. Since the election, people seem to have assumed that Trump would deliver on his election promises and that Congress would put up little opposition, particularly in the early stages of his tenure. Instead Trump has been given a wake-up call on how politics really works and to an extent, markets have as well."

On the corporate front, Apple could be in focus after a Chinese court overturned a ruling against the technology giant over iPhone patents.

There are no data releases of note due on Monday, but investors will eye a speech by Chicago Fed President Charles Evans in Madrid, while Dallas Fed President Rob Kaplan is due to speak about economic conditions at Texas A&M University.