U.S. stock futures were tilting higher early Wednesday but investors digested escalating tensions between the U.S. and China and an acceleration of cases of coronavirus in the U.S., threatening the prospects for a sustainable rebound from the coronavirus pandemic.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average
are 13 points, or less than 0.1%, lower at 25,757, those for the S&P 500 index
were trading 1.60 points, or less than 0.1%, higher at 3,138, while Nasdaq-100 futures
advanced 25.50 points, or 0.2%, at 10,557.75.
On Tuesday, the Dow
tumbled 396.85 points, or 1.5%, to end at 25,890.18, the S&P 500 index
shed 34.40 points, or 1.1%, closing at 3,145.32 and end a 5-session win steak; while the Nasdaq Composite Index
fell 89.76 points, or 0.9%, to finish at 10,343.89, after carving out an intraday 10,518.98 record.
What’s driving the market?
Equity markets are struggling to find a catalyst to substantially move in either direction, as Wall Street parses the latest development in Sino-American relations and an unabated increase in cases of COVID-19 in a number of U.S. states.
The U.S. reported 60,000 new coronavirus cases Tuesday, a single-day record, according to data compiled by Johns Hopkins University. The seven-day average for cases is higher than the 14-day average, an indication that the spread is intensifying, according to a Wall Street Journal analysis of the publicly available health data.
Overall, more than 2.93 million coronavirus cases have been confirmed in the U.S. along with at least 130,306 deaths. Texas and Florida have become the epicenters of the recent resurgence, with Florida reporting 7,361 cases on Tuesday and Texas recording more than 10,000 infections—the highest one-day increase in infections thus far.
Also being weighed is a late-Tuesday report from Bloomberg News that top advisers of President Donald Trump have advocated undermining the Hong Kong dollar’s peg to the U.S. dollar, as a retaliation for Beijing’s new security law imposed on the semiautonomous state.
The report said that such a proposal faces opposition and may harm the U.S. as much as China, but still highlights the potential for further erosion in the relationship between the the world’s two largest economies.
“The US Administration mulling new HKD measures may add nervousness, but on balance the USD’s recovery attempts are also tending to prove quite subdued,” wrote analysts at UniCredit, referring to recent strengthening in the U.S. dollar.
The broader market, with the exception of the technology-laden Nasdaq, have traded in a relatively tight range since a recent peak on June 8 for the S&P 500 index and the Dow, as stalled business reopenings threaten the prospects of a V-shaped, or quick and sharp, recovery from a deep recession, barring a vaccine or effective treatments of the deadly illness.