US pre-open: Wall Street set for lower open as oil retreats

Stocks on Wall Street looked set for a slightly weaker open on Wednesday as oil prices slipped back and investors awaited the release of a key jobs report.

At 1230 GMT, Dow Jones Industrial Average futures and S&P 500 futures were both down 0.3%.

Stocks in Europe had kicked off the session with solid gains but indices came off their highs as oil prices retreated.

West Texas Intermediate was down 2.1% to $33.67 a barrel and Brent crude was 1.3% lower at $36.35 after data from the American Petroleum Institute showed US crude inventories rose 9.9m barrels last week. This was much higher than the 3.6m barrel increase forecast by analysts.

US crude inventories from the Department of Energy are due at 1530 GMT.

Politics will also be in focus after Republican and Democrat presidential hopefuls Donald Trump and Hillary Clinton had strong showings in the Super Tuesday primaries.

“The commanding leads now held by Donald Trump and Hilary Clinton have removed some of the uncertainty surrounding the upcoming presidential race. Nevertheless, it is far from clear that either candidate will be good for corporate America,” said Rebecca O’Keeffe at Interactive Investor.

“Over the coming months investors will have to scrutinise each candidate's prospective economic policies carefully to establish what a Trump or Clinton Presidency would really mean for financial markets.”

On the corporate front, oil and gas firm Chesapeake Energy rose in pre-market trade after its former chief executive officer, Aubrey McClendon was indicted on charges of conspiring to rig bids.

Elsewhere, earnings from fashion retailers Abercrombie & Fitch and American Eagle Outfitters will be in focus.

In macroeconomic news, investors will eye the release of the ADP employment report at 1315 GMT, which is widely considered a pre-cursor to Friday’s all-important nonfarm payrolls.

Rabobank expects the report to show private job creation slowed down to 190,000 in February from 205,000, in line with consensus estimates.

Societe Generale, however, reckons the report will show a solid increase of 225,000 private workers in February.

“Though this series has not had the best track record in predicting the Bureau of Labor Statistics’ private payroll series, it should be consistent with our estimate of an increase of 230K private payrolls for Friday’s print,” it said.