Wall Street futures in red as Trump-CEOs scandal weighs on sentiment

US stock indexes dropped sharply on Thursday amid rising concerns that tension between President Donald Trump and business leaders will affect his ability to push key economic reforms in Congress later in the year.

The Dow Jones industrial average fell more than 270 points to end 1.2 percent lower at 21,750.73, with Cisco System on top of decliners.

The tech giant was down about 4 percent to trade at $31.04 after it confirmed sales will continue to decline in the present quarter between 1 and 3 percent.

Also, rumors that White House top business advisor Gary Cohn could resign as director of the National Economic Council weighed on market sentiment.

While Cohn has previously showed himself unsatisfied with Trump comments on the violent clashes in Charlottesville, Virginia, a WH official confirmed "Gary is focused on his responsibilities as NEC Director and any reports to the contrary are 100% false."

On the corporate front, Wal-Mart displayed better-than-expected second quarter earnings as the company reported more activity both in its online platform and in-store. But that wasn’t enough to hold prior gains, leaving retail stocks up for a noticeable downward correction.

The S&P 500 moved down 1.5 percent to stand around 2,430.01 by the closing bell, as information technology faced strong losses. The tech-heavy Nasdaq composite sank by 1.9 percent to 6,221.91, marking its third-biggest intraday retreat in 2017.

• Dow Jones Industrial Average: -274.14 / -1.24% / 21750.73
• Standard & Poor’s 500: -38.10 / -1.54% / 2430.01
• Nasdaq Composite: -123.19 / -1.94% / 6221.91

On the data front, initial jobless claims came in at 232,000, down from an initially forecasted decline to 240,000. The Philadelphia Fed manufacturing index for August rose to 18.9, outperforming expectations of 18.5. Industrial production increased 0.2 percent in July, falling short from a forecasted 0.3 percent build.

The Street was also shocked by a terrorist attack on Barcelona. A van crashed into dozens of people in the city center of the coastal city. Authorities confirmed death toll of 13 people and more than a hundred injured.

Market players are waiting for preliminary readings on Michigan consumer expectations and consumer sentiment as of 14:00 GMT, with 81.0 and 94.0 seen.

Fort Financial Services