Dow Jones futures plunge 935 points, second wave concerns grow
US markets look set to start the week off in a volatile fashion, as Dow Jones futures plummet.
Dow Jones expected to plunge at the open
As of 2:47am (EDT), Dow Jones Industrial Average (DJIA) futures were trading down 935 points or 3.66%, suggesting the market would open significantly lower on Monday, 15 June.
S&P 500 futures and NASDAQ Composite futures were also trading lower – down 83 points and 221 points, respectively, according to Bloomberg.
This comes after US markets rebounded on Friday, following a horror showing on Thursday which saw the DJIA plunge 1,861 points or 6.9%.
Investors appear to have grown skittish in the face of a potential second wave Covid-19 outbreak, as well as dour comments from the US Federal Reserve last week, with the central bank forecasting the US economy will shrink by 6.5% in 2020.
Regardless of such forecasts, there were pockets of optimism on Friday, with Boeing, Dow and Raytheon all rising strongly. By comparison, Wal-Mart, Merck and Intel were the worst performing Dow constituents during last week's final session.
Catalysts behind the pullback
Elsewhere, Ed Yardeni, from Yardeni Research, over the weekend argued that 'The melt up [since the March lows] may need to take a break, as sentiment has turned too bullish too rapidly.'
'Now that reopening is happening, there's fear of suboptimal results: less social distancing triggering a second wave of the virus, followed by another round of lockdowns,’ Mr Yardeni finished.
Indeed, potential problems stemming from the current coronavirus situation continue to mount – from both an economic and public health perspective. For example, Sky News today reported that US cases of Covid-19 have surged in recent days, with ‘Alabama, Florida and South Carolina report[ing] a record number of new cases for the third day in a row on Saturday.’
The United States continues to top the list of most recorded coronavirus (Covid-19) cases, last standing at ~2.16 million – representing over 25% of the world's total reported coronavirus cases.
Data releases to watch
Looking at the US economic calendar for the week ahead: job openings data (April) will be released on Tuesday; federal budget data (May) will be released on Wednesday; initial jobless claims for the week ending 6 June will be released on Thursday; and consumer sentiment index data (June) will be released on Friday.
There are no significant US company earnings releases set to take place this week.
How to trade US stocks after hours with IG
Most AU traders can only trade the US stock market's from 23.30 to 06.00 AEST, but with our extended hours you can trade for much longer.
- CFDs on All Session US shares
18.00 to 10.00 Monday to Thursday, and 18.00 Friday to 07.00 Saturday AEST
- Share trading on All Session US shares
21.00 to 07:30 Monday to Thursday, and 21.00 on Friday to 07.00 Saturday AEST
You'll find our extended trading hours markets labelled ‘All Session’, to distinguish them from the shares which can only be traded in normal US market hours.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets