U.S. stock-index futures on Monday were poised for their worst day since October, as investors focused on the emergence of a fast-spreading variant of the novel strain of coronavirus that causes COVID-19, overshadowing optimism from news over the weekend that U.S. lawmakers agreed on a pandemic-relief deal.
Investors also, on Christmas week, will look toward the first day of trade for Tesla Inc., which officially entered the S&P 500 on Friday and accounts for 1% of the broad-market index’s price swings at its market value of over $650 million.
How are stock benchmarks performing?
Futures for Dow Jones Industrial Average
were down 478 points, or 1.6%, to reach 29,631, which would represent the worst day for the index since Oct. 28, FactSet data show.
S&P 500 index futures
traded 71.70 points, or 1.9%, lower at 3,635.50.
retreated 160 points to reach 12,552.75, a drop of 1.3%.
On Friday, the stock market closed higher for the week:
posted a weekly gain of 0.4%
The S&P 500 index
The Nasdaq Composite Index
closed out the week 3.1% higher
What’s driving the market?
Market participants to start Christmas week trade were contending with reports from Britain and South Africa of a new strain of coronavirus that has so far caused parts of London to invoke tighter lockdown and social-distancing procedures.
The sharp pullback in equities comes even as experts warn against overreacting and note that no evidence indicates that the variant is a more virulent strain of COVID-19, even if it is more contagious.
News of the virus’s evolution also comes despite an expected vote on a fresh fiscal spending bill that is paired with fresh aid for out-of-work Americans and businesses that have been devastated by the COVID-19 pandemic.
Over the weekend, Senate Majority Leader Mitch McConnell said a deal had been reached on an almost $900 billion coronavirus relief package and a vote on the bill is set for later Monday.
“Make no mistake about it, this agreement is far from perfect. But it will deliver emergency relief to a nation in the throes of a genuine emergency,” said Senate Democratic Leader Chuck Schumer.
Peter Cardillo, chief market economist at Spartan Capital Securities said that the “markets decline has [nothing] to do with the long-awaited stimulus package agreement struck by lawmaker, but rather the run-away virus situation in Great Brittan and Europe’s new travel restrictions.”
Meanwhile, markets are watching for the first trading day for Tesla Inc.
as a member of the S&P 500 index, marking one of the largest and, perhaps, volatile members to enter the broad-market index.