Dow Futures Drop 600 Points Amid U.S. Stimulus Uncertainty
Investing.com
Published Mar 11, 2020 07:58AM ET
By Noreen Burke
Investing.com - U.S. stock futures pointed to a sharply lower open on Wednesday after strong gains in the previous session, amid doubts over what U.S. President Donald Trump said would be “major” fiscal stimulus measures to counter the economic impact of the coronavirus outbreak.
By 07:50 AM ET (1150 GMT), Dow futures dropped 632 points, or around 2.5%. S&P 500 futures and Nasdaq 100 futures were both down around 2.6%.
Wall Street reversed course on Tuesday, with the three main indexes all rising by nearly 5% in anticipation of a major policy announcement. That pulled them back from the brink of a bear market.
But while Trump met with fellow Republicans in the U.S. Senate on Tuesday, he did not outline any measures to offset the economic fallout from the virus outbreak. A scheduled news conference took place without the President.
Futures received only a temporary lift from the Bank of England, which earlier joined other central banks in cutting interest rates, as part of a broader package of measures to support bank lending in order to cushion the economy.
With the Federal Reserve having already cut rates this month, the pressure is on the European Central Bank to act when it meets on Thursday.
Benchmark U.S. 10-year Treasury yields were down 4 basis points to 0.71%, more than double Monday's record low yield of 0.32%.
Market participants largely expect the Fed to cut interest rates for the second time this month at the conclusion of next week's regularly scheduled policy meeting, after it surprised investors last week with a 50-basis-point cut.
Elsewhere, crude oil futures turned lower again after Saudi Arabia ratcheted up its price war, asking national oil company Aramco (SE:2222) to increase its production capacity to 13 million barrels a day from 12 million currently. U.S. crude futures were down 2.9% at $33.37, while Brent was down 2.5% at $36.28 a barrel.
--Reuters contributed to this report
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