(Reuters) - U.S. stock index futures fell sharply on Wednesday after the resignation of top economic adviser Gary Cohn, a supporter of free trade in the White House, triggered worries that President Donald Trump may push ahead with plans to impose hefty metal tariffs and ignite a global trade war.
Dow e-minis 1YMc1 were down 257 points by 7:20 a.m. ET.
Manufacturing giants Boeing (BA.N) and Caterpillar (CAT.N) slipped 2 percent in premarket trading, while General Electric (GE.N) dipped 1.4 percent after Deutsche Bank analysts warned that rising metal input costs could weigh on a deal for its rail business.
S&P 500 e-minis ESc1 were down 20.75 points and Nasdaq 100 e-minis NQc1 fell 40.75 points.
The declines continued from Tuesday night after Cohn, the architect of the tax overhaul enacted in December, said he would resign, a move that came after he lost a fight over Trump’s plans for hefty steel and aluminum import tariffs.
Cohn, a former president and chief operating officer of investment bank Goldman Sachs, was seen by investors as a stabilizing force within the Trump administration.
Demand for safe-haven assets including U.S. government debt and Japanese yen rose, while Wall Street’s fear gauge, the CBOE Volatility index .VIX, was up 11 percent at 20.42.
The ADP’s National Employment Report, due at 8:15 a.m. ET, is expected to show private employers added 195,000 jobs in February, compared with 234,000 jobs in January.
A more comprehensive report that includes hiring in both public and private sectors is due on Friday.
The Federal Reserve will publish its Beige Book, a compendium of anecdotes on the health of the economy, in the afternoon. The Fed’s next policy meeting is scheduled for March 20-21.
Fed’s New York President William Dudley and Atlanta Fed chief Raphael Bostic are expected to speak on Wednesday.
Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila
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