US stock futures dragged down after State of Union speech

U.S. stock futures edged lower on Wednesday after President Donald Trump at his State of the Union speech raised the prospect of another shutdown should his demand for border wall funding not be met.

The benchmark S&P 500, which has notched five straight days of gains, now stands about 7 per cent away from its record closing high in September, after having fallen about 20 per cent from that level last year. The strong rally in stocks has been supported by the optimism of a U.S.-China trade truce, the Federal Reserve's signal of ending its monetary policy tightening and a largely positive earnings season.

About 71 per cent of more than half of the S&P 500 companies that have reported earnings has topped profit expectations, according to IBES data from Refinitiv. At the State of the Union address on Tuesday, the President outlined his political priorities without providing specific policy details and reiterated his vow to build a wall along the U.S.-Mexico border.

On the trade front, Trump said a deal was possible with China if Beijing agrees to "real structural change". Next week senior U.S. and Chinese officials are poised to start another round of trade talks in Beijing to push for a deal to protect American intellectual property and avert a March 2 increase in U.S. tariffs on Chinese goods, two people familiar with the plans said on Tuesday.

At 6:59 a.m. ET, S&P 500 e-minis were down 0.11 per cent. Dow e-minis were down 0.14 per cent and Nasdaq 100 e-minis were down 0.06 per cent. Walt Disney Co rose 0.8 per cent after the company topped Wall Street estimates helped by its booming theme park business and growth at its ABC broadcast network.

Snap Inc jumped 25.0 per cent after the company said the number of people using its Snapchat app would remain at current levels this quarter, easing worries it would continue to lose users to rival Facebook Inc's Instagram. Videogame maker Electronic Arts Inc tumbled 15.7 per cent as the company cut its yearly revenue outlook after its newest "Battlefield" title sold about a million fewer units than expected. Rival Activision Blizzard Inc fell 2.4 per cent.

On the other hand, Take-Two Interactive Software Inc rose 1.3 per cent though in lighter volumes after the company raised its full-year adjusted revenue forecast, boosted by solid sales of its "Red Dead Redemption 2" and "NBA 2K19" titles. A Commerce Department report due at 8:30 a.m. ET is expected to show that the November trade deficit narrowed to $54 billion, down from $55.5 billion in October. Also on deck is Fed Chairman Jerome Powell's address at 7:00 p.m. ET (0000 GMT) in Virginia. 

(With inputs from agencies.)