Futures contracts tied to the major U.S. stock indexes pointed to a lower open on Wednesday as traders grew worried about the increasing number of newly confirmed coronavirus cases.
Dow Jones Industrial Average futures dipped 200 points, suggesting an opening loss of about 205 points when regular trading resumes at 9:30 a.m. S&P 500 and Nasdaq-100 futures slid 0.7% and 0.4%, respectively.
“Stock futures are trading lower this morning and safe haven assets, including gold, are rallying as new coronavirus cases continue to rise around the world, weighing on the prospects for a continued rebound in the global economy,” said Tom Essaye of The Sevens Report.
Shares of companies primed to benefit from the economy reopening faltered in premarket trading. United Airlines fell 3.2%. Delta, American and Southwest all slid over 2%. Carnival, Norwegian Cruise Line and Royal Caribbean were lower by 5.1%, 4.1% and 3.9%, respectively. Retailer Gap also fell more than 2%.
A CNBC analysis of Johns Hopkins University data found the U.S. 7-day average of coronavirus cases surged more than 30% from a week ago. California is one of the states that has seen a dramatic spike in cases, adding more than 6,000 on Monday alone. Overseas, Germany reported a cluster of newly confirmed cases at a slaughter house in Lower Saxony. That’s the latest in a series of coronavirus outbreaks in Germany.
This led investors to increase exposure to traditional safe-haven assets such as gold. The precious metal rose 0.4% to trade at $1,788.30 per ounce.
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said Tuesday the U.S. is seeing a “disturbing” surge in new Covid-19 cases. He also struck a more upbeat tone on a vaccine potential and said he expects one by early 2021.
Wall Street was coming off a banner day, with the Nasdaq Composite posting its 21st closing record for 2020 on Tuesday. The Nasdaq’s gain on Tuesday also represented its eighth straight day of gains, its longest winning streak since December, when it advanced for 11 straight sessions.
Shares of consumer technology company Apple rose 2.1% on Tuesday to reach a new all-time high, notching the benchmark one day after it unveiled new operating systems for its iPhone and computers. Apple pleased its investors further by announcing it will phase one Intel chips in favor of its own products when building new Mac devices.
