Monday U.S. stock index futures faced the worst day since October as investors focused on the emergence of a fast-spreading variant of the coronavirus strain that causes COVID-19, overshadowing the optimism of the news over the weekend, to which US lawmakers agreed to a pandemic relief deal.
During Christmas week, investors will also look to the first day of trading for Tesla Inc. The stock, which was officially included in the S&P 500 on Friday, accounts for 1% of the broad index with a market value of over $ 650 billion.
How are stock benchmarks performing?
Futures for Dow Jones Industrial Average
was down 479 points, or 1.6%, to hit 29,634, which would mark the worst day for the index since October 28, according to FactSet data.
S&P 500 index futures
traded 66.20 points, or 1.8%, lower at 3,640.
Nasdaq 100 futures
pulled back 140 points to hit 12,570.50, down 1.1%.
On Friday, the stock market closed higher for the week:
posted a weekly gain of 0.4%
The S&P 500 Index
increased by 1.3%
The Nasdaq Composite Index
closed the week 3.1% higher
What is driving the market?
Market participants began trading over Christmas week with reports from the UK and South Africa of a new strain of coronavirus that has so far led parts of London to put in place stricter lockdown and social distancing procedures. In addition, the governments of the EU countries have introduced restrictions on inbound flights from the UK.
The sharp decline in stocks is also evident when experts warn of overreactions and determine that there is no evidence that the variant is a more virulent strain of COVID-19, even if it is more contagious.
The news of the virus’s development also comes despite an expected vote on a new household bill that comes with new aid to unemployed Americans and businesses devastated by the COVID-19 pandemic.
See: What Could Shake Markets In 2021 Even If Vaccines Are Introduced?
Over the weekend, Senate Majority Leader Mitch McConnell, R-Ky., Announced that an agreement on a coronavirus aid package worth nearly $ 900 billion had been reached and a vote on the bill was scheduled for later Monday .
“Make no mistake, this agreement is far from perfect. But it will provide emergency relief to a nation in a real emergency, ”said Chuck Schumer, Democratic chairman of the Senate.
Peter Cardillo, chief market economist at Spartan Capital Securities, said the “market decline has [nothing] to do with the long-awaited stimulus package the legislature has put in place, but with the virus out of control in the UK and new travel restrictions in Europe . ”
In the meantime, the markets are waiting for the first day of trading Tesla Inc.
As a member of the S&P 500 index, this marks one of the largest and possibly most volatile members to be included in the broad market index.
Investors saw some second tier economic data. The Chicago Federal Reserve's measure of national economic activity declined from 1.01 in October to 0.27 in November.
Which companies are in focus?
Shares of Monmouth Real Estate Investment Corp.
rose 5.4% in premarket trading Monday after investment management firm Blackwells Capital LLC made an unsolicited offer to buy Monmouth.
CVS Health Corp.. CVS announced Monday that it will begin COVID-19 vaccinations in long-term health facilities across the country.
Stocks fell over 4% before the opening bell.
What are other markets doing?
In Asia, the Shanghai Composite SHCOMP rose 0.8%, the Hong Kong Hang Seng Index HSI lost 0.7% and the Japanese Nikkei 225 NIK lost 0.2%.
In Europe, the Stoxx 600 Europe SXXP fell 2.8%, while the London FTSE 100 stock index UKX fell 2.7%.
The 10 year treasury note yield TMUBMUSD10Y fell 4.8 basis points to 0.900%. Returns and prices move in opposite directions.
Oil futures were lower, with the US benchmark CL.1 falling 4.4%.
Gold futures for delivery in February GCG21 fell 0.5%.