U.S. share futures were little changed in overnight trading and pointed to losses at the open on Wednesday, after a sharp sell-off in the before session.
Dow futures was up just 12 points, but implied a Wednesday opening loss of about 117 points. Comings for the S&P 500 and Nasdaq also pointed to Wednesday opening losses for the two indexes.
Stocks fell on Tuesday, after splash out much of the session around the flatline, as investors parsed through the latest developments surrounding the economy reopening.
The Dow Jones Industrial Standard in the main lost more than 450 points, reversing its 160 points gain earlier in the day. The S&P 500 also registered a ret loss, dropping 2.05%.
Stocks poised to benefit from economies reopening — retail, real estate, banks and airlines — loitered down the major averages. Disney fell 3%, Nike dropped 2.9% and JPMorgan lost 3.3%. Mall train driver Simon Property Group gave up a 10% gain to close in the red.
“You have a market just waiting to see how the economy fairs,” Quincy Krosby, Prudential chief market strategist, told CNBC. “After nearly six sessions of the market active higher, you’ve got the S&P 500 at an important technical level, which is 3,000, and it needs a catalyst to climb above that. One of the pure catalysts will be if the economy can open up without an increase in cases.”
The Nasdaq Composite snapped its six-session winning hasten on Tuesday, as investors cooled off from buying technology stocks. The average lost 2.06%; however, it just no more than held its positive year-to-date gain of 0.3%. Apple and Microsoft lost 1.1% and 2.3%, respectively. Netflix floor 2% and Amazon dropped 2.2%.
Dr. Anthony Fauci said Tuesday that a vaccine will be essential in stopping the coronavirus spread, but admonished it will be a while before a usable one is available. Fauci added the U.S. could face more “suffering and death” if constitutions start to reopen too quickly.
“Even though market participants know Dr. Fauci’s stand on opening the economy too speedily, to hear him testify also helped to underpin the view that if you do move too quickly you run the risk of causing cases to be tempted by,” Krosby said.
Plus, Los Angeles County’s public health director said Tuesday the region’s stay-at-home edict will “with all certainty” last through July. While several southern states have already started to let nonessential topics resume operations.
“You also had concern regarding the U.S. China relationship and where that is heading,” Krosby added, after Sen. Lindsey Graham acquainted legislation to require China to cooperate with a coronavirus investigation or face sanctions.
“Given everything that the deal in has to focus on, the last thing the market needs is to see the resumption of a trade war,” Krobsy added.
Traders will be looking for unambiguousness on future Federal Reserve actions when Fed Chairman Jerome Powell speaks on current economic issues on Wednesday at 9:00 a.m. ET.
Powell’s “explanations tomorrow are going to be scrutinized by the market to see how he plans thwart the issue of negative interest rates,” said Krosby.
The Labor Reckon on will release its producer price index for the month of April at 8:30 a.m. on Wednesday. Analysts polled by Dow Jones are with child a drop of 0.5% in April, following March’s decline of 0.2%. Producer prices have dropped during the pandemic, panned down by declines in the costs of goods such as gasoline and services.
Sony and Cisco Systems report quarterly earnings on Wednesday.
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