U.S. stock futures were tilting higher early Wednesday even as investors digested escalating tensions between Washington and Beijing along with an acceleration of cases of coronavirus in the U.S., threatening the prospects for a sustained rebound from the COVID-19 pandemic.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average
are 26 points, or 0.1%, higher at 25,795, those for the S&P 500 index
were trading 4.35 points, or more than 0.1%, higher at 3,140.75, while Nasdaq-100 futures
advanced 33.50 points, or 0.3%, at 10,565.75.
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.
Investors also weighed 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.
Which stocks were in focus?
- KKR & Co.
announced Wednesday an agreement to buy retirement and life insurance company Global Atlantic Financial Group Ltd. Its shares were up.
- Walgreen’s Boot Alliances Inc.
Shares of were up after the pharmacy chain said it will take a 30% stake in VillageMD as part of its plans to open up 700 new primary care practices at Walgreens stores.
- TaylorMorrison Home Corp.
said Wednesday June was its strongest sales month ever. The homebuilder’s shares were up 2.5% before the opening bell.
- Shares of Alcoa Corp.
ran up Wednesday, after the aluminum products maker provided preliminary second-quarter results that were above analyst expectations, citing productivity gains and cost savings amid challenges resulting from the COVID-19 pandemic.
- Shares of Nikola Corp.
soared Wednesday, putting them on track to snap a five-day losing streak, after J.P. Morgan turned bullish on the battery- and hydrogen-electric truck maker, citing a more attractive valuation following the recent selloff.
- Instant messaging platform Slack Technologies Inc.
said Wednesday it has acquired Rimeto, a provider of business directory services for an undisclosed sum.
- GoHealth Inc., a health insurance marketplace, set terms for its planned initial public offering on Wednesday, with plan to offer 39.5 million shares priced at $18 to $20 each.
How did other assets perform?
West Texas Intermediate U.S. crude futures
for August delivery rose 11 cents to $40.71 a barrel, on the New York Mercantile Exchange. In precious metals, August gold futures
gained $4.40, or 0.4%, to trade at $1,814 an ounce, after hitting its highest level since Sept. 2011 on Tuesday.
The greenback was barely changed against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index.
In European equities, the Stoxx Europe 600 index
fell 0.7%, and London’s FTSE 100
was down 0.4%. In Asia markets, China’s benchmark CSI 300 Index
gained 1.6%, extending its weekly rally. Hong Kong’s Hang Seng index