U.S. Stock Futures Extend Drop After Fed, U.S. Virus Case Report

(Bloomberg) -- Losses picked up in U.S. stock index futures after the Federal Reserve signaled that the path to economic recovery will be long and as worries over a second wave of coronavirus infections grew.

June contracts on the S&P 500 fell 1.6% as of 8:28 a.m. in London, extending earlier declines. Those on Dow Jones Industrial Average dropped 2%.

In Europe, the benchmark Stoxx 600 Index slumped 2.7%, with all subgroup gauges dropping and the losses led by shares of travel companies and banks.

Fed Chairman Jerome Powell Chair indicated on Wednesday the central bank will keep providing stimulus into the U.S. economy until its troubled labor market has recovered from the harm of the coronavirus pandemic.

The latest Fed meeting conclusion has “certainly been the trigger to renew growth concerns for markets,” said Jingyi Pan, market strategist at IG Asia Pte. “This reminder that the Covid-19 hit to the economy is still a very prevalent issue has also been bolstered by reports of a surge in some localized cases in the U.S., altogether seeing to the continued paring back of the earlier risk-on sentiment in markets.”

Coronavirus cases reached 2 million in the U.S., according to data from Johns Hopkins University. That’s after Texas recorded 2,504 new cases, the highest one-day total since the pandemic emerged, according to state health department figures.

©2020 Bloomberg L.P.