US futures drop on temporary corporate tax cuts news

The US equity futures witnessed fresh selling in the Asian trades, fuelled by risk-off sentiment, as markets assessed the overnight comments from the US house tax committee Chairman Brady noting that, “the tax bill will only have temporary cut in the corporate rate from 35% to 20%.”

This implies that a tax proposal with a temporary corporate cut will revert back to the original 35% tax rate after a decade. The US President Trump cited previously that this temporary cut proposal would limit its ability to spur economic growth.

The slump in equities dragged the greenback sharply lower, with the USD/JPY pair and Treasury yields too catching up on the sell-off. At the time of writing, Dow 30 futures recover losses to trade near 23,350 levels, still down -0.10%, while the S&P 500 futures drops -0.19% to 2,570 levels, extending the retreat from all-time highs.