US stocks looked set for a muted open on Wednesday as President Trump suffered a double blow after his former campaign chief was found guilty of fraud and his former long-time lawyer pleaded guilty to campaign finance violations.
At 1210 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.1%, while Nasdaq futures were 0.1% higher.
Trade talks between the US and China are due to kick off in Washington later on Wednesday, with delegations from Beijing set to meet with US officials to try to find a resolution to the escalating tariff war between the two countries. Trump said in an interview with Reuters on Monday that he didn't expect much from the talks and that there was no time frame for an end to the trade war.
Meanwhile, concerns were growing that Trump might be vulnerable to impeachment after his former lawyer, Michael Cohen, pleaded guilty to violating campaign finance laws for the purpose of influencing the election and implicated the president, saying that he told him to arrange payments to silence women alleged to have had affairs with him.
In addition, Trump's former campaign chairman, Paul Manafort, was found guilty on eight fraud charges. He was convicted of five counts of tax fraud, two counts of bank fraud and one count of failure to report a foreign bank account.
CMC Markets analyst Michael Hewson said: “Cohen's plea, which puts the President under the spotlight even more, and opens him up to charges of criminal conduct, has raised concerns that he might be vulnerable to impeachment in the coming months. While this is unlikely in the short term, any shift in the balance of power after the mid-terms in November, could increase that prospect if the Republicans lose their majorities.”
In corporate news, retailer Target was sharply higher in pre-market trade after its second-quarter profit and revenue beat analysts' expectations.
Elsewhere, Navigators Group looked set to surge at the open after agreeing to be bought by the Hartford Financial Services Group for $2.1bn, or $70 a share, which is premium of just under 9% to its closing price on Tuesday.
Mallinckrodt was in the red after it confirmed that the US Food and Drug Administration has rejected its new drug application for a treatment for newborn babies at risk of developing severe jaundice.
United Continental was likely to be in focus after it named Gerry Laderman as its new chief financial officer, while Lowe's fell in pre-market trade as the retailer's second-quarter same-store sales missed expectations.
On the data front, existing home sales are at 1500 BST, while the latest FOMC minutes are at 1900 BST. Dean Popplewell, vice president of market analysis at Oanda, said: “It's unlikely that this afternoon's minutes will provide any new clues on how US interest rate policy is going to develop further. The Fed's implied rate path – two further rate rises in 2018 and probably two more in 2019 – is mostly priced in.”