U.S. Index Futures Fall as Mnuchin Seeks Unused Funds From Fed
(Bloomberg) -- U.S. stock index futures fell after Treasury Secretary Steven Mnuchin and the Federal Reserve publicly disagreed Thursday over whether to extend the central bank’s emergency pandemic lending programs.
December contracts on the S&P 500 dropped 0.5% at 2:49 p.m. in Tokyo. Futures declined 0.7% on the Dow Jones Industrial Average and were little changed on the Nasdaq 100 Index. Mnuchin sought a 90-day extension for four of the central bank’s emergency lending programs, but requested other programs expire on schedule on Dec. 31 and the Fed return $455 billion to the Treasury so Congress can spend the money elsewhere. But the central bank pushed back and said the programs served a vital role.
“I think traders are concerned that the Fed backstop is being compromised by a Treasury secretary who’ll be out of a job in a few months,” said Max Gokhman, Pacific Life Fund Advisors’ head of asset allocation. “It’s very hard to make decisive day-to-day calls in a market like this where there are so many sources of volatility.”
On Thursday, tech shares led U.S. equity indexes higher, with the stay-at-home trade gaining appeal as investors weighed the impact of tougher virus restrictions on economic growth along with the outlook for widespread vaccine distribution within months. The S&P 500 Index ended the day up 0.4%.
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