U.S. Stocks Set for Rebound After Worst Selloff in Four Months
(Bloomberg) -- U.S. index futures are pointing to a rebound for equities at the open on Wall Street after concerns over tougher coronavirus-related lockdowns yesterday fueled the S&P 500 Index’s worst decline in more than four months.
S&P 500 contracts expiring in December were up 0.9% as of 8:10 a.m. in London, after earlier rising as much as 1.5%. Futures on the Nasdaq 100 and Dow Jones Industrial Average advanced 1.1% and 0.7% respectively. Stocks tumbled Wednesday amid a surge in Covid-19 hospitalizations, especially in the Midwest, while the lack of a fiscal stimulus deal ahead of next week’s presidential election added to investor pessimism.
“There’s a degree of short covering and opportunistic buying after the big selloff,” said Ilya Spivak, head Asia Pacific strategist at DailyFX. “I don’t think it means anything in terms of a big leg up for U.S. stocks. This is just a short-term, tactical move.”
European equities also rebounded, following yesterday’s slide to a five-month low for the Stoxx Europe 600 Index amid tightening restrictions in Germany and France. The benchmark was up 0.3%, ahead of a European Central Bank meeting later today.
With news about Europe’s stricter virus measures “digested,” the U.S. market will revert to focus on the presidential election,” said Ben Emons, head of global macro strategy at Medley Global Advisors. “The blue wave remains priced in, which means the market will refocus on stimulus.”
House Speaker Nancy Pelosi said she hopes the recent selloff in U.S. stocks will prompt President Donald Trump to agree to Democratic demands in stalled stimulus talks and end a three-month stalemate that has added to tension ahead of the Nov. 3 vote. Polls predict Trump will be defeated by Joe Biden, whose Democratic Party is also expected to win control of Congress.
Investors will also be looking toward earnings reports due after the close from major tech companies including Apple Inc., Amazon.com Inc. and Facebook Inc.
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