Stock futures surrender positive aspects after Powell sees ‘important drawback dangers’


Get real time updates directly on you device, subscribe now.

U.S. stock futures were flat on Wednesday as investors pored through downbeat remarks from the top-ranking Federal Reserve official. 

Dow Jones Industrial Average futures were up just 2 points after rallying more than 180 points earlier in the session. S&P 500 and Nasdaq 100 also gave up most of their gains. 

Stocks fell on Tuesday, after spending much of the session around the flatline, as investors parsed through the latest developments surrounding the economy reopening. 

The Dow Jones Industrial Average lost more than 450 points, reversing its 160 points gain earlier in the day. The S&P 500 also registered a steep loss, dropping 2.05%. 

Stocks poised to benefit from economies reopening — retail, real estate, banks and airlines — dragged down the major averages. Disney fell 3%, Nike dropped 2.9% and JPMorgan lost 3.3%. Mall operator Simon Property Group gave up a 10% gain to close in the red. 

Some of those stocks, including Disney, were rebounding in premarket trading Wednesday.

“You have a market just waiting to see how the economy opens,” said Quincy Krosby, Prudential chief market strategist.. “After nearly six sessions of the market moving 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 main catalysts will be if the economy can open up without an increase in cases.”

The Nasdaq Composite snapped its six-session winning streak on Tuesday, as investors cooled off from buying technology stocks. The average lost 2.06%; however, it just barely held its positive year-to-date gain of 0.3%. Apple and Microsoft lost 1.1% and 2.3%, respectively. Netflix fell 2% and Amazon dropped 2.2%.

Dr. Anthony Fauci said Tuesday that a vaccine will be essential in stopping the coronavirus spread, but warned it will be a while before a usable one is available. Fauci added the U.S. could face more “suffering and death” if states start to reopen too quickly.

“Even though market participants know Dr. Fauci’s stand on opening the economy too soon, 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 rise,” Krosby said. 

Plus, Los Angeles County’s public health director said Tuesday the region’s stay-at-home order will “with all certainty” last through July. While several southern states have already started to let nonessential businesses resume operations.

“You also had concern regarding the U.S. China relationship and where that is heading,” Krosby added, after Sen. Lindsey Graham introduced legislation to require China to cooperate with a coronavirus investigation or face sanctions.

“Given everything that the market has to focus on, the last thing the market needs is to see the resumption of a trade war,” Krosby said. 

Get real time updates directly on you device, subscribe now.

Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More