Stock futures fell on Tuesday night as overnight trading began, pointing to a slightly lower open to start trading in July, the third quarter and the second half of the year.
Earlier, stocks rallied to close their best overall quarter since 1998, and the best second quarter ever, after the S&P 500 rose nearly 20% for the April-June period. The Dow and Nasdaq increased around 17.5% and 30%, respectively, during the second quarter.
The historic recovery came as market participants observed a rapid infusion of fiscal and monetary policy stimulus to boost the virus-affected economy, and as states and cities across the country began easing their blockade restrictions in mid of the quarter.
But recent new increases in coronavirus infections in the south and west, and subsequent reversals and pauses of new reopens, could put a limit on stocks in the short term, according to some analysts.
“We have seen a lot of movement in the second quarter, and to be fair, it has been fueled by a lot of positivity,” Tom Essaye, founder of Sevens Report, told Yahoo Finance’s The First Trade on Tuesday. “If we think about where we were at the end of March, we have come a long way, not just with the virus, even though we are now seeing a rebound, we have made progress there, and even the economy is starting to recover.”
Still, “the virus count is increasing,” Essaye added. “That, at a minimum, is going to delay the economic reopening, and the markets have to put a price on that a little bit. And I think there is a little more to it turning sideways or sinking further. ”
The southern and western states continued to fight to keep infections under control. Based on Tuesday’s data, Texas recorded its worst day for new coronavirus infections and hospitalizations so far since the start of the pandemic, with the state seeing 6,975 positive tests for a total of 159,986. Cases in California increased by 6,367 for the second largest jump in the state so far.
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told a Senate committee Tuesday that he “would not be surprised” if coronavirus cases increase to 100,000 per day in the United States, from the current average of around 40,000 per day. , if the country cannot keep the pandemic under control.
Lack of visibility into the coronavirus pandemic, corporate earnings and the trajectory of economic activity has led to a lack of conviction among market participants regarding the direction of stocks in the second half of the year.
According to a survey published earlier this week by market research firm DataTrek, market participants lack a consensus opinion on where the S&P 500 is headed. The distribution of responses among the 341 respondents who responded to where they felt The S&P 500’s run, from more than 10% from current levels to more than 10% from current levels, was divided almost equally.
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6:07 pm ET: Stock futures open slightly lower
These were the main moves at the start of the overnight session for US stock futures, starting at 6:07 pm ET:
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S&P 500 futures (ES = F): 3,086.5, down 3.75 points or 0.12%
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Dow futures (YM = F): 25,668.00, 21 points less, or 0.08%
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Nasdaq futures (NQ = F): 10,140.00, down 7.25 points, or 0.07%
NEW YORK, NEW YORK – MAY 26: The New York Stock Exchange (NYSE) is in Lower Manhattan on the first day that traders can return to the historic floor of the exchange on May 26, 2020 in New York City . While only a small number of merchants will return at this time, those who do will have to perform temperature checks and wear face masks at all times while on the floor. The Dow rose more than 600 points in the morning trade as investors see a recovery in economic activity in the United States (Photo by Spencer Platt / Getty Images)
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