US stocks turned south on Tuesday morning after US public health agencies requested a temporary suspension of use of Johnson & Johnson’s single-shot COVID vaccine out of “precaution” due to extremely high blood clotting problems. rare. The news comes as cases of the virus are increasing in the US, heading into the summer and when the country was hoping to increase production of Johnson & Johnson’s COVID remedy, which has far fewer logistical challenges than other vaccines that must be stored in very cold temperatures.
How are stock benchmark indices traded? Futures for the Dow Jones Industrial Average YM00, -0.34% YMM21, -0.34% were trading 116 points higher at 33.515, a gain of 0.3%. S&P 500 ES00 Index futures, -0.23% ESM21, -0.23% fell 10.80 points to reach 4.109.75, or 0.3%. Nasdaq-100 NQ00, + 0.05% NQM21, + 0.05% futures fell 4.75 points, or less than 0.1%, to 13.803. On Monday, the Dow DJIA, -0.16% fell 55.20 points to close at 33,745.40, a decrease of 0.2%; the S&P 500 SPX, -0.02%, fell less than one point to finish at 4,127.99; while the Nasdaq Composite Index COMP, -0.36% was down 50.19 points, ending at 13,850.00, a loss of 0.4%. What is driving the market? Stocks faltered early Tuesday after the two major U.S. federal public health agencies, the Food and Drug Administration and the Centers for Disease Control and Prevention called for an immediate hiatus in the use of the Johnson & Johnson JNJ vaccine, + 0.24% COVID-19, after six recipients in the US developed a rare disorder involving blood clots within six to 13 days of vaccination. The news is having a relatively modest impact on the investment mood on Wall Street, but it may be a reminder of some of the challenges of reopening the economy from the worst pandemic in more than a century. “Fortunately, the launch of vaccination in the US is well under way, so the downward effect on both US oil and equities should be quite limited,” wrote Stephen Innes, global strategist. in chief of Axi. He added that with the stock market nearing records, it has been sensitive to negative headlines. So far, nearly 7 million Americans have received J&J injections, and about 9 million more have been delivered to states, CDC data shows. Scientists from the FDA and CDC will jointly investigate possible links between the vaccine and the bleeding disorder and determine whether it should continue to be used or be limited. The J&J injection, which was 66.1% effective in preventing moderate to severe disease, was seen as a game changer to quickly vaccinate Americans. The J&J injection was the third approved for use in the US, behind the Pfizer PFE vaccines, + 1.01% and Moderna MRNA, -1.08%. The vaccine report comes as the US faces a further surge in COVID cases, with reports of 70,000 new coronavirus infections per day, according to data from Johns Hopkins University. That’s even after hitting a record for single-day vaccinations of 4.6 million on Sunday. The economic rebound has been closely linked to Americans getting vaccinated and going back to work and kids going back to school. The chairman of the Federal Reserve Bank of St. Louis, James Bullard, said Monday that while it was too early to talk about reducing the central bank accommodation, he said that getting 75% to 80% of the people getting vaccinated could indicate that it’s time to cut back on Fed bond buying. “When you start getting vaccinated 75%, 80% vaccinated and the CDC starts giving more hopeful messages that we are controlling this better and begin to relax some of his guidelines, then I think the whole economy will gain confidence from that, ”Bullard said during an interview with Bloomberg TV. Meanwhile, investors were also on the lookout for a report on inflation. The US consumer price report for March is due out at 8:30 am ET and economists surveyed by Dow Jones project a 0.5% monthly increase and 2.5% year-on-year. Fed officials have emphasized that they are willing to keep rates close to 0% even if inflation starts to rise because policy makers believe it will be transitory. However, market participants have expressed some skepticism about the central bank’s inflation outlook. “Even if the Federal Reserve has downplayed concerns about inflation, investors will closely follow the release of US CPI data,” Pierre Veyret, a technical analyst at ActivTrades, wrote in a daily note. Ipek Ozkardeskaya, a senior analyst at Swissquote, said that the market’s reaction to the inflation report will depend on the degree to which it is outside the expected ranges. “The market’s reaction to the inflation data will, of course, depend on the robustness of the data, but also on how willing investors are to accept Jerome Powell’s prediction that higher inflation will not last long enough to compromise investment. (Fed) of the Federal Reserve inflation target of an average of 2%, ”wrote Ozkardeskaya. “Jerome Powell will keep repeating that inflation is not a long-term problem,” the Swissquote analyst said. The session will see a parade of Fed speakers, including Philadelphia Fed Chairman Patrick Harker, who will deliver a speech on the economic outlook at the Delaware State Chamber of Commerce at noon, Richmond Fed Chairman Thomas Barkin will speak at the Ohio Valley Economic Roundtable at the same time. Market participants were also analyzing data from China after the country’s exports surged in March, suggesting that COVID’s grip on the nation may be experiencing further relaxation. The data showed that imports rose 38.1% from March a year ago in dollar terms, beating analyst consensus estimates, while exports rose 30.6% during the period, below the expectations but still strong. What companies are in focus? Shares of J&J fell about 3% in premarket trading after the FDA and CDC called for an immediate pause in the use of its COVID-19 vaccine on Tuesday, “as a precaution.” inflation report and news that Singapore-based Grab Holdings Inc. will be released through a merger with special-purpose acquisition company Altimeter Growth Corp. AGC. Altimeter shares were up more than 7% in the previous market.