On Friday, U.S. stock index futures were trading lower as hesitation of a delay until 2019 for a corporate tax cut can stall the stock market rally that its seen since President Trump has taken office.
The Republican tax-cut bill could be postponed after Senate Republicans revealed that the plan would provide corporate rate cuts of 20 percent per year and give small businesses a deduction instead of a business rate. The description of the bill differs distinctly on corporate, business and individual tax cuts from legislation described by the House of Representatives.
Since the election of President Trump, the S&P 500 index has rose over 20 percent mostly driven by his pledge to cut corporate taxes. All three major indexes were on target to close lower for the week, specifically with the S&P and the Dow on course to post weekly losses despite eight straight weeks of gains.
The S&P 500 is trading at 18 times expected earnings, which is high compared to its 10-year average of 14.3, according to data. Reducing corporate taxes would increase earnings and reduce stock prices. Even with third quarter earnings slowing down, stocks continue to trade at record levels.
Third quarter earnings are forecasted to have increase 8 percent, compared with predictions of a 5.9 percent increase, according to data.
Shares of Nvidia rose 4.7 percent after the chipmaker’s revenue for the quarter topped forecasts.
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Hertz Global Holdings rose 9.5 percent as the car rental company reported a higher than projected net profit.
Nordstrom dropped 1.1 percent after its quarterly sales ranked in lower than anticipations.
Dow e-minis fell 0.27 percent or 63 points, with 32,085 contracts traded.
S&P 500 e-minis ESc1 were down 0.43 percent or 11 points, with 219,085 contracts changing hands.
Nasdaq 100 e-minis dropped 0.39 percent or 24.75 points, with 38,292 contracts traded.