US pre-open: Stocks set for losses as oil retreats

US futures pointed to a lower open on Wall Street following healthy gains in the previous session and amid weaker oil prices, as investors continued to digest dovish comments by Federal Reserve governor Lael Brainard.

At 1040 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all down 0.6%.

CMC Markets’ Jasper Lawler said: “Stocks in the US look set for a lower open on Tuesday with Dow Jones pointing towards a triple digit loss. There is some profit-taking with the massive reversal on Monday looking unsustainable in the short term.”

Oil prices retreated after the International Energy Agency downgraded its forecast for global oil demand for 2016 and 2017 and said rebalancing the oil market would take longer than previously thought. West Texas Intermediate was down 2.5% to $45.15 a barrel while Brent crude was off 2.2% at $47.26.

Stocks in the US ended higher on Monday on the back of a dovish speech by Federal Reserve governor Lael Brainard, who said at the Chicago Council on Global Affairs that although economic progress is being made, it would be wise for the Fed to keep monetary policy loose.

In addition, Minneapolis Fed President Neel Kashkari told CNBC that policy makers should take their time to when it comes to making a decision on interest rates.

The more dovish tone from Brainard and Kashkari followed hawkish comments last week from Boston Fed President Eric Rosengren, which had sparked concerns that the Fed would hike rates at its next policy meeting on 20-21 September.

On the corporate front, semiconductor maker Intersil Corp surged in pre-market trade after Japanese chip maker Renesas Electronics announced that it will buy the company for $3.2bn.

Elsewhere, oil and gas firm Anadarko Petroleum could be in focus after saying late on Monday that its board of directors has agreed to buy the deepwater Gulf of Mexico assets of Freeport McMoRan Oil & Gas for $2bn.