Lockdown fears are back, and so are concerns that disinflation may be making a return.
Global markets and US index futures slumped alongside shares in Europe, where a resurgence of virus cases and a planned lockdown in Germany cast doubt on the region’s economic recovery. Bond yields tumbled and the dollar jumped towards recent peaks on Tuesday with markets in a cautious mood ahead of Congressional testimony by Fed Chair Jerome Powell and Treasury Secretary Janet Yellen for clues on the pace of economic rebound.
At 715 a.m. ET, Dow E-minis were down 137 points, or 0.42%, S&P 500 E-minis were down 11.75 points, or 0.31% and Nasdaq 100 E-minis were down 7.00points, or 0.05%.
Energy giants Chevron, Occidental Petroleum and Exxon Mobil all dropped between 1.5% and 3.5% premarket as oil prices tumbled 3% on fears that new pandemic curbs and slow vaccine rollouts in Europe will slow a recovery in demand. Apple, Facebook and Microsoft eased between 0.2% and 0.7% from the previous session’s jump. Shares of beloved meme stock GameStop, which is transitioning itself into an ecommerce firm, dropped 0.6% ahead of its fourth-quarter results due after markets close. U.S.-listed shares of AstraZeneca Plc fell 2.5% after a U.S. health agency raised fresh doubt on the results of the drugmaker’s large-scale COVID-19 vaccine trials.
A mixed bag of new Western sanctions on China, coronavirus concerns and Turkish tumult after President Tayyip Erdogan’s shock sacking of the central bank chief at the weekend left investors awaiting a firmer signal.