U.S. stock futures wobbled Wednesday as an increase in global Covid-19 infection levels led to concerns about the pace of economic recovery.
Futures tied to the S&P 500 and the Dow Jones Industrial Average wavered between gains and losses after two straight days of declines. Technology-heavy Nasdaq-100 futures slid 0.3%.
A new wave of Covid-19 infections is sweeping through a number of countries including India and Japan, raising the prospect of fresh hurdles to the anticipated global economic rebound. Health authorities are also warning that new variants may emerge that are resistant to the existing batch of coronavirus vaccines. Given those concerns, investors are putting the brakes to what has been a furious rally in stocks in recent weeks, leaving the major indexes hovering near record highs.
“There are still risks in this market, particularly as it relates to the vaccine rollout and virus mutations,” said Shoqat Bunglawala, head of international multiasset investments at Goldman Sachs Asset Management. “We’re still likely to be in an environment with some volatility.”
Investors are also closely monitoring corporate earnings to see if the current valuations of expensive stocks can be justified.
are among a string of companies scheduled to report quarterly results before the market opens.
will post earnings after the New York closing bell.
“We expect earnings to surprise on the upside, but the risks are asymmetric. In an environment where markets are at record highs, any company that doesn’t deliver is really punished,” said
chief strategist at Pictet Asset Management. “Over the next few months the direction of earnings will determine the direction of the market.”
The retreat in U.S. stocks this week is simply a “normal pause” in a bull market, with investors taking the opportunity to book profits and reassess their risk appetite, Mr. Paolini said. “As long as the U.S. economy is strong, it’s not really worth the risk of betting against the equity market.”
Ahead of the market open, shares in
fell almost 8% after the streaming giant said subscriber growth for the first quarter was weaker than expected.
In bond markets, the 10-year U.S. Treasury yield edged up to 1.575%, from 1.562% on Tuesday. Yields rise as prices fall.
Overseas, the pan-continental Stoxx Europe 600 climbed 0.5% after its biggest one-day drop since late December.
In Asia, most major stock indexes closed lower. Japan’s Nikkei 225 fell 2%, while Hong Kong’s Hang Seng declined 1.8%. The Shanghai Composite Index ended the day relatively flat.
Write to Caitlin Ostroff at [email protected]
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8