Stock-index futures fell hard Wednesday morning, under pressure as a continued rise in COVID-19 cases in the U.S. and Europe heightened investor worries over the economic recovery.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YM00, -1.62% were down 490 points, or 1.8%, at 26,875, while S&P 500 futures ES00, -1.34% dropped 50.35 points, or 1.5%, to 3,332.75. Nasdaq-100 futures NQ00, -1.10% dropped 133.75 points, or 1.2%, to 11,454.25.
The losses come after the Dow DJIA, -0.80% on Tuesday fell 222.19 points, or 0.8%, to end at 27,463.19, while the S&P 500 SPX, -0.30% fell 0.29 point, or 0.3%, to finish at 3,390.68. The Nasdaq Composite COMP, +0.63% bucked the weaker trend to rise 72.41 points, or 0.6%, to close at 11,431.35.
What’s driving the market?
Stocks have been under pressure this week as Germany and France weighed further restrictions on business activity in an effort to contain the rise in COVID-19 cases and the U.S. saw the number of new cases hit records.
The number of new U.S. cases daily rose back above 70,000 on Tuesday after hitting a record above 80,000 at the end of last week. The U.S. has reported a record 500,000 cases over the past week, the New York Times reported, while the seven-day average of confirmed new cases hit a record of 69,967 on Monday, according to a Wall Street Journal analysis of data from Johns Hopkins University.
“In 36 states, the hospitalization rate for the coronavirus increased by at least 5% over in the past seven days,” said David Madden, market analyst at CMC Markets. “Traders keep an eye on the hospitalization rates because the authorities want to ensure the health care services aren’t overwhelmed — that can often be a trigger to bringing in tougher restrictions.”
Jitters ahead of the Nov. 3 presidential election, now less than a week away, were also contributing to volatility, analysts said. Democratic challenger Joe Biden has maintained a lead over President Donald Trump in the polls, but the race has tightened. An unclear or contested election result would be a potential worst-case scenario, analysts said.
Meanwhile, the chief executives of Alphabet Inc.’s GOOG, +0.86% GOOGL, +0.92% Google, Facebook Inc. FB, +2.23%, and Twitter Inc. TWTR, +4.63% will appear before a Senate Commerce subcommittee hearing titled, “Does Section 230’s Sweeping Immunity Enable Big Tech Bad Behavior?”
Investors also continue to wade through the busiest week of the earnings reporting season, including better-than-expected results late Tuesday from software giant Microsoft Corp. MSFT, +1.50%, though the company’s forecast came in shy of estimates. Shares were down 2% in premarket trade.
The U.S. economic calendar features advance trade in goods data for September at 8:30 a.m. Eastern. Economists surveyed by MarketWatch expect the trade deficit to widen to $83.5 billion from $82.9 billion a month earlier.
Which companies are in focus?
- FireEye Inc. FEYE, -0.42% shares were up 4% ahead of the bell after reporting record financial results and an increased annual forecast late Tuesday.
- Juniper Networks Inc. JNPR, -0.18% shares rose more than 4% in premarket action after reporting results late Tuesday that beat Wall Street forecasts for earnings and revenue.
- General Electric Co. GE shares were up more than 5% after the industrial conglomerate reported a surprise third-quarter adjusted profit and positive cash flow, as revenue fell less than forecast.
- Shares of United Parcel Service Inc. UPS were up in premarket trade after the package delivery company reported third-quarter profit and revenue that topped expectations, with all three business segments beating forecasts.