US pre-open: Stocks set for weaker open after Trump win, but futures off lows

US futures pointed to a weaker open on Wall Street, although losses were set to be a lot less heavy than originally thought, as investors digested news that Donald Trump has won the US presidential race.

Remo Fritschi, institutional sales manager at ADS Securities London said: “Yes, the Trump presidency will bring a swathe of uncertainty, but futures markets certainly appear to have been overreacting – London’s FTSE-100 was tipped to open a hulking 300 points lower at one stage, but we’re now just 10 points or so adrift. Similarly, the Dow was called down as much as 800 points – yes, it does seem as if we will be opening with losses, but the magnitude will be far smaller than had been expected.

“There’s not much on the economic calendar today and what we do have is likely to be eclipsed by the fact markets need to try to account for what the new order will look like. However the big challenge will be that with economic policy having made up such a small part of the campaign, we are by all accounts entering another chapter of unknown territory for financial markets.”

At 1100 GMT, Dow Jones Industrial Average futures were down 1.6%, or 296 points, while S&P 500 futures were 1.7% lower and Nasdaq futures were off 2%. Futures were well off their earlier lows, with investors seemingly reassured by the conciliatory tone struck by Trump in his acceptance speech.

Trump said: “We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re gonna rebuild our infrastructure which will become, by the way, second to none and we will put millions of our people to work as we rebuild it.”

In currency markets, the dollar was down 1.9% versus the yen at 103.11 but well off earlier lows, while the Mexican peso was also paring losses somewhat after plunging to its worst level ever against the greenback earlier.

Monex Europe said: “Trump’s policy platform and campaign statement certainly seem to contain plenty of fodder for USD weakness, including but not limited to $5 trillion in unfunded tax cuts and a trade spat with Mexico, not to mention the rest of the world. But for now, a reasonably conciliatory victory speech for Trump seems to have triggered a rally that has left USD only mildly weaker than this morning’s open against many pairs."

Meanwhile, gold prices rallied the most since the Brexit vote, with futures up 2.4% to $1,304.50 an ounce on the yellow metal’s safe-haven appeal.

In oil markets, West Texas Intermediate was up 0.3% to $45.11 a barrel, while Brent crude was 0.5% higher at $46.29.

San Francisco Fed President John Williams is due to talk about the economy at the University of San Francisco later in the day, while US wholesale inventories are at 1500 GMT.