Stocks are poised to open to the downside, with notable weakness in technology stocks, which had been the market leader.
Two events are weighing on the markets today. First, overnight the Washington Post reported that Robert Mueller, the special counsel overseeing the investigation into Russia's role in the 2016 election, is expanding the probe to investigate whether President Trump attempted to obstruct justice.
The last time the markets had a notable drop—May 17, when the Dow dropped 373 points—came on reports that former FBI Director James Comey had written a memo implying Trump asked him to stop the investigation of former national security adviser Michael Flynn.
While the markets have learned to ignore many of President Donald Trump's tweets, it is clearly sensitive to any suggestion that the president may have engaged in behavior that could trigger a sustained investigation. Traders have allowed the Trump agenda to be pushed out, but they certainly do not believe it is dead.
The second issue for markets is the ongoing fallout from the Fed's very aggressive position on interest rates. The Fed raised rates yesterday and indicated they still expected to raise rates one more time and begin reducing its balance sheet. But inflation has been below the Fed's targets recently and other weak economic data—like retail sales—led many to believe that the Fed would acknowledge the weakness and reiterate that more rate cuts were "data dependent," as they have said many times.
But it didn't happen. The Fed pushed ahead with rate cut plans with nary a nod to the recent weakness. That hawkishness caught some by surprise.