Dow Jones poised to open lower as virus fears persist

Dow Jones futures in focus

Sharp volatility returned to equity markets on Wednesday – with all of the key US benchmarks finishing out the session lower. European markets also fell, with the €1.9 billion Wirecard scandal in particular drawing negative attention to the DAX.

On a more granular level, the Dow Jones Industrial Average ended the day down 2.72% or 710 points, to close at 25,445. No Dow constituent traded higher on Wednesday, though Walmart, Procter & Gamble and McDonald's saw their share prices fall the least. By comparison, Dow, Boeing and Exxon Mobil were the worst performing Dow stocks – down between 4.71% and 7.01%.

Looking at the other key US indices, the Nasdaq Composite finished the day down 222 points, just below the 10,000 point level; while the S&P 500 benchmark shed 2.59% or 80 points to close at 3,050 points.

At the time of writing Dow Jones Industrial Average futures were trading down 252 points or 0.99% – implying the key US benchmark would open lower on Thursday.

S&P 500 and Nasdaq futures were also lower.

Second wave fears persist

This bearish market activity comes after US Covid-19 cases continue to spike. Specifically, as reported by the Washington Post earlier this week, seven US states – including Arkansas, Arizona, California, North Carolina, South Carolina, Tennessee and Texas – reported the largest spike in Covid-related hospitalisations since the coronavirus pandemic began.

All up, the United States currently has 2.46 million total reported cases of Covid-19.

Looking at the coronavirus’ impact on equity markets, Chris Zaccarelli, the CIO of Independent Advisor Alliance, told CNBC:

'The market has been optimistic that the economy is re-opening and that life would get somewhat back to normal, but the virus may have other ideas.'

Mr Zaccarelli finished by noting:

'The market has again gotten caught up in the crossfire of increasing numbers of Covid-19 cases, trade protectionism and politics.'

Investors likely to watch jobs report

On Thursday, both continuing jobless claims data (for the week ending 13 June) and initial jobless claims report data (for the week ending 20 June), are set to be released.

Economists polled by Market Watch forecast that 1.38 million jobless claims will have been made for the week ending 20 June, representing a slight decline on a week-over-week basis.

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