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U.S. stocks looked set for a muted open Wednesday, holding off from building on the previous session’s milestone-setting rally, as investors waited for an announcement on the Trump administration’s tax plan.
Futures for the Dow Jones Industrial Average YMM7, +0.04% rose 16 points to 20,961, while those for the S&P 500 index ESM7, +0.02% added 1 point to 2,386. Futures for the Nasdaq-100 index NQM7, +0.06% rose 3 points to 5,551.
“Markets are excited to hear what Trump has to say on tax reform, giving him an opportunity to finally deliver on pro-growth policy, but conscious of having already failed miserably on health care and little to show for his first hundred days,” analysts at Accendo Markets said in a note.
The Trump administration is due to reveal a “massive” tax package later on Wednesday that will deliver reductions bigger than “any tax cut ever,” the president has said.
Trump won’t present the tax announcement himself, but will leave it to Treasury Steven Mnuchin and National Economic Director Gary Cohn, according to media reports. The press briefing at the White House is scheduled for 1:30 p.m. Eastern Time.
Trump has vowed to slash the corporate tax rate from 35% to 15%, but analysts note there have been few details given on how the cuts will be funded.
“The tax reform bill will still need Congress’s approval to pass. If Trump is unable to get enough support, it will likely lead to substantial market disappointment likely to initiate a dollar and equity sell off,” said Devata Tseng, technical analyst at FXPro, in a note.
The dollar traded mostly higher against other major currencies ahead of the announcement on Wednesday, with the ICE Dollar Index DXY, +0.30% up 0.4% at 99.177.
A potential government shutdown this weekend was also on investors’ minds on Wednesday. Some of those concerns, however, eased after Trump backed off on a demand for border-wall funding, which was seen as an obstacle.
How long will the Nafta renegotiation take?
Secretary of Commerce Wilbur Ross told The Wall Street Journal that the renegotiation of the Nafta pact with Canada and Mexico may happen by December 2017.
Earnings season: The season continues in full swing, with a deluge of results hitting premarket. Shares of PepsiCo Inc. PEP, -0.14% slipped 0.8% even as earnings beat analyst forecast.
Anthem Inc. ANTM, +2.40% results also topped expectations, but shares were little changed ahead of the bell.
Shares of Chipotle Mexican Grill Inc. CMG, +0.63% rose 1.3% in Wednesday’s premarket trade after the casual restaurant chain reported first-quarter earnings ahead of forecasts late Tuesday.
Other markets: Stocks in Asia closed mainly higher, propelled by optimism over the prospect of a U.S. tax overhaul.
European markets were slightly lower, after surging to historic highs following the first round of the French presidential election on Sunday. Centrist Emmanuel Macron came out on top and will battle against far-right Marine Le Pen in the second round on May 7—a vote Macron is expected to win.