News

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

GMT Country Event Expectation Previous

9:00

EZ

 Industrial Production (MoM) (Apr)

-20.0%

-11.3%

14:00

US

 Michigan Consumer Sentiment (Jun) 

75.0

72.3

17:00

US

 U.S. Baker Hughes Oil Rig Count

-

206

Disclaimer

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM.COM. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

CFDs and Spot FX are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.31% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs and Spot FX work, and whether you can afford to take the high risk of losing your money. Read more
Read more
Mail Call Chat