US Stock futures drop, hit ‘limit down’ halt, amid unprecedented volatility
US stock futures pointed to big losses on Wednesday as the markets remained highly volatile with the government response to the coronavirus fallout still unfolding.
A violent reversal in Treasury yields in response to a potential $1 trillion stimulus package helped to unnerve investors.
US futures on the Dow Jones Industrial Average indicated a more than 1,000-point loss at Wednesday’s open. S&P 500 and Nasdaq-100 futures were also down. Futures contracts for the indices were in “limit down” territory, a situation where trading is halted after futures have hit a 5 percent loss and can go no lower. The S&P 500 gained 6 percent on Tuesday.
Exchange-traded funds that track the indexes are not subject to limit-down restrictions, however, and suggested what the open would look like. The SPDR S&P 500 ETF was down 6 percent in premarket trading, the SPDR Dow Jones Industrial Average ETF was down 6.5 percent, and the Invesco QQQ Trust was off 5.8 percent.
Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4 percent or more in either direction for seven consecutive sessions. This tops the previous record of six days from November 1929, according to LPL Financial. The S&P 500 is 25 percent off its record high through Tuesday’s close.
