Dow Jones futures trade down 205pts following Monday’s vaccine rally
US markets rallied overnight on renewed covid-19 vaccine hopes, with the Dow Jones Industrial Average proving to be the best performing benchmark of the session.
Equity markets rally on vaccine hopes, futures market reverse the narrative
The Dow Jones Industrial Average and S&P 500 benchmarks rallied firmly overnight, while the tech-heavy Nasdaq 100 fell, after BioNTech and Pfizer announced that significant and promising progress had been made on the development of their covid-19 vaccine.
With a study comprised of over 40,000 participants, the companies reported that their experimental covid-19 vaccine ‘was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection.’
Despite such regulatory hurdles, it was reported that some 50 million doses of the vaccine could be produced by the end of CY20 and as many as 1.3 billion doses by the end of CY21.
Ultimately, while this vaccine news remains far from definitive – market participants responded as if it were a sure thing: The Dow Jones finished out the session up 834 points at the 29,157 point level, while the S&P 500 rose 1.17%. It was only the tech-centric Nasdaq 100 that fell behind, with the benchmark plunging 2.16% or 260 points to the 11,830 point level.
Looking at these market moves, IG Market Analyst Kyle Rodda said:
‘There was little concern for detail and nuance. But given the confidence of both companies that their vaccine was going to be a winner, maybe there need not be. Despite all the doubts, humanity and the marvels of medical science appears to moving ahead of schedule in ridding humanity of the virus.’
In that mad rush, perhaps investors were making a simple division – between the stocks that would benefit from a swift reopening of global commerce and those that wouldn’t, as much. Or maybe more technically – is it that valuations may finally be starting to matter again, with many high profile and high multiple tech stocks falling sharply on Monday.
Amazon and Facebook fell ~5%, Apple 2%, Netflix close to 9%, while Alphabet actually eked out a gain during yesterday’s session. Less prominent tech names that had run up during the height of the pandemic suffered even more pronounced losses: Used-car reseller Carvana plunged 7.55%, video software company Zoom crashed 17.55%, while e-commerce companies Etsy and MercadoLibre fell 17% and 10%, respectively.
Is tech’s outperformance over? Only time will tell.
Dow Jones lower following strong Monday session
Despite solid hopes of a vaccine, at the time of writing Dow Jones futures traded down around 205 points or 0.71% (10:02 PM New York time), suggesting the key US benchmark would open lower on Tuesday.
Nasdaq futures were also trading lower at the time of writing.
Want to trade US indices like the Nasdaq 100 and Dow Jones – long or short?
Create an IG trading account or log in to your existing account to get started now.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
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
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.