U.S. stock futures on Wednesday night pointed to a drop for stocks on Wall Street at the Thursday open.
As of 1:27 a.m. ET Thursday, Dow Jones Industrial Average futures were down 141 points, signalling an implied opening drop of 247.86 points at the open. S&P 500 and Nasdaq-100 futures also pointed to declines for the two indexes at the open on Thursday.
The moves came amid a roller-coaster week for stocks on Wall Street, which saw the 30-stock Dow swinging 1,000 points or higher two times within three days. Following a Wednesday surge, the three major averages stateside moved out of correction territory, meaning they are now less than 10% down from their 52-week highs.
You have to wonder why (the Fed’s) acting like this and you have to wonder especially why they’re using their very, very sparse ammunition up — a 50 basis point cut — very early in a crisis.
Richard Harris
Chief Executive, Port Shelter Investment Management
A series of factors have been driving investor sentiment, ranging from developments around the coronavirus outbreak that continued to spread globally to former Vice President Joe Biden’s major wins during Super Tuesday.
Earlier in the week, the Federal Reserve also cut its benchmark interest rate unexpectedly by 50 basis points, citing that coronavirus which “poses evolving risks to economic activity.” It was the central bank’s first such emergency cut since the 2008 financial crisis.
The move failed to assuage stock market concerns about the potential economic impact of the coronavirus outbreak while triggering sharp movements in the bond markets, with the yield on the benchmark 10-year Treasury note dropping below 1% for the first time ever. The 10-year Treasury yield was last trading at 1.0037%.
“We’re nowhere near the sort of situation where the Fed should be acting like this,” Richard Harris, chief executive at Port Shelter Investment Management, told CNBC’s “Street Signs Asia” on Thursday morning.
“You have to wonder why (the Fed’s) acting like this and you have to wonder especially why they’re using their very, very sparse ammunition up — a 50 basis point cut — very early in a crisis,” Harris said.
— CNBC’s Fred Imbert contributed to this report.
