US Stock Futures Plunge as Fears of Second COVID19 Outbreak Hit Risk Appetite

Equities

Major US stock index futures fell sharply yesterday, incurring their heaviest losses since March as fears of a second wave of COVID19 intensified. John Hopkins University showed that the number of new cases rose significantly in several states driving the total confirmed cases in the United States to more than 2 million. Investors are worried that the second round of infections could lead to another suspension of business activity. Treasury Secretary Steven Mnuchin stated that the US can't close the economy again, but his words failed to relieve the market pressure. The Dow Jones Industrial Average futures fell as low as 25060, the S&P500 futures tumbled to 2995, and Nasdaq futures plunged to 9583.

USD

The dollar index, which measures the greenback against a basket of major currencies, rebounded sharply to 96.94 as investors rushed to safety. The growing fears of a second COVID19 outbreak weighed on investors' risk appetite and eased their expectations for a fast recovery. Commodity currencies were among the biggest losers against the dollar, where the AUDUSD tumbled to $0.6798, and the USDCAD rose as high as 1.3665. Market participants will closely monitor the number of new cases and how the US government will react to the developments.

Metals

Precious metals eased slightly as the dollar recovered. The price of a gold ounce hovered around $1730, the price of a silver ounce declined to $17.39, and palladium futures held steady near $1920.

Oil

Oil prices tumbled sharply as fears of a second COVID19 outbreak in the United States triggered concerns over the future of demand levels. If governments were forced to shut down the economy again due to another serious outbreak, the recovering demand levels will start moving south again, leading to another oversupply issue. The West Texas Intermediate crude July delivery declined to $34.48, and Brent Blend August delivery dived to $37.00.

Major Economic Events

Disclaimer

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