Futures tied to major U.S. equity benchmarks fell on Monday as coronavirus infections jumped and negotiations for a fiscal stimulus package before the election came down to the wire.
Dow Jones Industrial Average futures fell 256 points, or 0.9%. The move implied an opening drop of more about 300 points. S&P 500 futures lost 0.9%. Nasdaq 100 futures fell 0.8%.
The decline in futures came amid a record surge in new coronavirus cases in the U.S. The country saw more than 83,000 new infections on both Friday and Saturday after outbreaks in Sun Belt states, surpassing a previous record of roughly 77,300 cases set in July, according to data from Johns Hopkins University.
White House chief of staff Mark Meadows said Sunday that the U.S. will not get control of the pandemic amid the surge in new cases.
Optimism also dimmed that the White House and Republicans could strike a stimulus deal with Democrats before the election. Meadows and House Speaker Nancy Pelosi in separate interviews accused each other of moving the goalposts on stimulus talks.
Stocks with the most to lose from rising cases and a stalled stimulus plan led the decline Monday. Royal Caribbean shares fell 3% in premarket trading. Delta fell 2.9%.
This week marks the last week of October and the final trading period before Nov. 3. Major averages are on track for modest gains for the month, with the S&P 500 and the Nasdaq both rising more than 3% so far. The 30-stock Dow is up about 2% this month.
“Based on the action in the stock market we’ve seen over the past two weeks, it seems to us that it will take some serious new-news to fuel a significant decline over the next week and a half,” Matt Maley, chief market strategist at Miller Tabak, said in a note on Sunday.
Former Vice President Joe Biden maintains a sizable lead over President Donald Trump in national polls, although the gap has narrowed slightly as of late.
Traders will keep their eyes peeled for a raft of Big Tech and blue-chip corporate earnings as well as key economic data this week. Apple, Facebook, Alphabet, Amazon, Boeing and Caterpillar all report later in the week, while the first look at third-quarter GDP is due on Thursday.
The Dow and the S&P 500 are coming off their first losing week in four as talks over the next coronavirus stimulus package dragged on. Treasury Secretary Steven Mnuchin said Friday that House Speaker Nancy Pelosi is “still dug in” on a number of issues in the aid deal.
The benchmark 10-year Treasury yield jumped to a four-month high of 0.84% last week, sparking a rally in bank stocks.
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