* Dollar down, erases post-election gains
* Bank stocks fall; gold and VIX futures rise
* Target up on smaller drop in comparable sales
* Futures down: Dow 106 pts, S&P 13 pts, Nasdaq 32.5 pts (Adds details, comments, updates prices)
By Yashaswini Swamynathan
May 17 (Reuters) - U.S. stocks were set to open lower on Wednesday after reports of a leaked memo by former FBI chief James Comey caused alarm on Capitol Hill, raising questions about whether President Donald Trump tried to interfere with a federal investigation.
Trump asked Comey to end a probe into former national security adviser Michael Flynn’s ties with Russia, according to the reports.
The latest development could distract Trump from pursuing his proposed policies such as tax cuts and simpler bank regulations, which have underpinned a record-setting rally on Wall Street.
The news comes on the heels of a tumultuous week at the White House when Trump unexpectedly fired Comey and then disclosed classified information to Russia’s foreign minister about a planned Islamic State operation.
The dollar index retreated on Wednesday, erasing all of the gains inspired by Trump’s business-friendly stance after his November election victory. The euro hit its highest level since Nov. 7.
Prices of safe-haven gold and the CBOE Volatility Futures index rose by the most in over one month signaling a lack of appetite for risk assets.
“Equity investors are beginning to display concerns over the domestic political situation that is not likely to suddenly vanish,” Peter Cardillo, chief market economist at First Standard Financial wrote.
“The equity markets have ignored the noise out of Washington. However, we think the situation is likely to change as this crisis leads to an interruption of the pro-growth White House agenda, deflating the Hope Rally.”
Dow e-minis were down 106 points, or 0.51 percent at 8:28 a.m. ET (1228 GMT), with 49,247 contracts changing hands.
S&P 500 e-minis were down 13 points, or 0.54 percent, with 299,325 contracts traded.
Nasdaq 100 e-minis were down 32.5 points, or 0.57 percent, on volume of 64,198 contracts.
Bank stocks including Goldman Sachs and Bank of America, which have outperformed in the post-election rally, were off 1-2 percent in premarket trading.
Among other stocks, Target was up 4.8 percent at $57.10 after the big-box retailer reported a smaller-than-expected drop in comparable sales.
AbbVie slipped 2.4 percent to $65.25 after Coherus BioSciences received a favorable patent ruling against AbbVie’s Humira drug. Coherus shares rose nearly 7 percent to $23.55.
Colgate-Palmolive was up 3.5 percent after the New York Post reported that the toothpaste maker’s CEO had recently signaled he would be open to sell the company. (Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)