U.S. stocks are seen opening a little lower Wednesday, continuing the previous session’s weakness as investors reassess the economic growth outlook amid worries about the impact of the ongoing Covid-19 wave.
At 7:05 AM ET (1105 GMT), the Dow Futures contract was down 10 points, or less than 0.1%, S&P 500 Futures traded largely unchanged, while Nasdaq 100 Futures dropped 10 points, or 0.1%.
Wall Street returned from the Labor Day weekend to losses of over 260 points, or 0.8%, in the blue-chip Dow Jones Industrial Average amid worries of slowing growth, exacerbated by the disappointing August jobs report.
Concerns are growing that the ongoing Covid-19 pandemic is hurting the country’s economic recovery, just as the Federal Reserve considers pulling back its bond-buying program.
Data collated by Reuters showed that more than 20,800 people have died in the United States from Covid-19 in the past two weeks, up about 67% from the prior two-week period, as children head back to school and companies try to confirm return-to-office plans. The seven-day average death count fell for the first time in seven weeks on Tuesday, but it remains to be seen whether this is a statistical quirk due to the Labor Day holiday weekend.
Influential investment bank Morgan Stanley (NYSE:MS) Wednesday downgraded its recommendation on U.S. equities to underweight, citing “outsized risk” to growth through October.
Investors will study the Job Openings and Labor Turnover Survey, at 1000 AM ET (1400 GMT), for further clues of the state of the U.S. labor market, with employers expected to have posted 10 million jobs in July compared with 10.073 million the previous month.
In corporate news, GameStop (NYSE:GME), a meme stock favorite, will release its second-quarter results after the market closes on Wednesday, and is expected to announce another hefty loss.
Lululemon Athletica (NASDAQ:LULU) is also due to report its second-quarter earnings, and investors will be looking for the company’s outlook given the shift back to office life, gradual though it may be at the moment.
Elsewhere, Nio (NYSE:NIO) will be in the spotlight after the Chinese electric vehicle maker announced plans to sell up to $2 billion in new American depositary shares to fund its expansion.
Rival Tesla (NASDAQ:TSLA) sold over 44,000 China-made vehicles in August, the China Passenger Car Association said on Wednesday, more than just under 33,000 in July and 33,155 units in June. Most were exported to Europe.
Crude prices bounced Wednesday after recent losses, with attention turning to the U.S. market as producers in the Gulf of Mexico struggle to restart operations in the wake of Hurricane Ida.
Over a week after the hurricane made landfall, more than three-quarters of U.S. Gulf production remains offline. The inventory data from the American Petroleum Institute later Wednesday and the U.S. Energy Information Administration on Thursday will be studied closely, as traders look for a more complete picture of the storm’s impact on crude production and refinery output.
By 7:05 AM ET, U.S. crude futures traded 1.3% higher at $69.22 a barrel, while the Brent contract rose 1.1% to $72.45.
Additionally, gold futures rose 0.2% to $1,801.45/oz, while EUR/USD traded 0.1% higher at 1.1844.