Wall Street set to open lower as banks fall, coronavirus cases surge

Wall Street was set to open slightly lower on Friday as bank stocks fell following the Federal Reserve's move to cap shareholder payouts and the United States set a new record for a one-day increase in coronavirus cases.

US lenders Bank of America Corp, JPMorgan Chase & Co, Goldman Sachs fell between 1.8% and 4% after the Fed limited dividend payments and barred share repurchases until at least the fourth quarter following its annual stress test.

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In the previous session, banks stocks had powered Wall Street's main indexes higher, helping them offset investor fears due to rising virus infections in several U.S. states.

The uptick in cases has also threatened to derail a strong rally for Wall Street that brought the S&P 500 within 9% of its February all-time high on the back of record government stimulus measures.

"There's a fight in the market between folks who believe that the economic resurgence is unstoppable and those who believe that there is more trouble ahead," said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland, Ohio.

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"It's more probable that the scenario is not as rosy as the market thinks."

At 8:35 a.m. ET, Dow e-minis were down 144 points, or 0.56%. S&P 500 e-minis were down 6 points, or 0.2% and Nasdaq 100 e-minis were up 0.25 points, or flat.

Nike slipped 3.6%, the most among the 27 of 30 blue-chip Dow Jones Industrials constituents trading before the bell, as the footwear maker posted its first loss in more than two years hurt by store closures.

Facebook Inc fell 1.1% after Verizon Communications Inc joined an advertising boycott that called out the social media giant for not doing enough to stop hate speech on its platforms.

A U.S. Commerce Department report showed personal income dropped 4.2% in May after surging 10.5% in April. Separately, a reading of core personal consumption expenditures price index edged up 0.1% last month after easing 0.4% in April.

Friday also marks the reconstitution of the FTSE Russell indexes, including large cap Russell 1000 and small cap Russell 2000, that often marks one of the biggest trading volume days of the year.