Stock futures fell in overnight trading on Wednesday as investors continued to monitor an uptick in new coronavirus cases amid the reopening economy.
Futures on the Dow Jones Industrial Average fell 384 points, implying a Thursday opening drop of more than 340 points. S&P 500 and Nasdaq 100 futures also pointed to a lower Thursday open for the two indexes. Trading volumes were thin early in the session.
The Dow and the S&P 500 snapped their three-day winning streak on Wednesday as stocks directly linked to a successful reopening underperformed, including airlines and cruise line operators. The tech-heavy Nasdaq Composite eked out a small gain, lifted by popular growth names such as Amazon and Netflix.
Investors turned more cautious as increases in coronavirus cases cast doubt on a swift economic recovery. Several states in the U.S. are experiencing a resurgence of infections. Arizona reported a record high number of new confirmed cases, while Texas saw an 11% daily spike in hospitalizations for patients with Covid-19 on Wednesday.
“We believe the market is pricing in quite a bit of good news and the rally is likely to take a breather in coming months as the recovery evolves,” Scott Wren, Wells Fargo’s senior global market strategist, said in a note. “We expect volatility in the coming months as we gauge how the reopenings are going and how consumer spending is progressing.”
New jobless claims data is set to come out Thursday morning, offering an update on the pace of the labor market’s recovery from the pandemic. Economist polled by Dow Jones expected a total of 1.30 million new filings for the week ending June 13, a decline from 1.54 million from the week prior.
Meanwhile, parts of the country continued to ease lockdown restrictions. New York City is on track to move to Phase 2 of its reopening on Monday, which includes some in-store retail, hair salons and select office spaces, Governor Andrew Cuomo said.
While the market remained choppy, major stock averages are set to post solid gains this week after a sharp pullback in the week prior. The 30-stock Dow and the S&P 500 have gained more than 2% each this week so far, while the Nasdaq has risen about 3.3%.
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