Future U.S. stock markets remained flat in trading overnight Tuesday amid renewed investor concern over the global recovery from the coronavirus pandemic.
Dow futures rose 20 points. The S&P 500 futures gained 0.08% and the Nasdaq 100 futures rose 0.3%.
On Tuesday, actions linked to an economic recovery led to losses amid rising new coronavirus cases in the U.S. and abroad.
The Dow Jones Industrial Average lost more than 300 points, dragged down by a 3.4% drop in Caterpillar shares. The S&P 500 fell 0.76%, with significant losses from airlines and cruise lines. The Nasdaq Composite fell 1.12% as Facebook, Apple and Tesla closed lower.
The Russell 2000 minimum capitalization level fell 3.58%, the worst day since June.
Many regions of the world are seeing cases of Covid-19 increase as highly contagious variants continue to spread, the World Health Organization said. Germany and France extend or implement new blocking measures.
Concerns about the recovery come on the market’s one-year anniversary. Shares have rebounded from the bottom with the S&P 500, which rose about 80% from a one-year low, marking the best start to a new recorded bullish market.
On Wednesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony in the U.S. House Financial Services Committee. In the first joint appearance on Tuesday, the couple acknowledged asset prices with very rich market value, but said they were not concerned about financial stability.
“I would say that while asset valuations rise by historical metrics, it is also believed that with vaccinations at a rapid pace, the economy will be able to get back on track,” Yellen said during the testimony. “I think in an environment where asset prices are high, what’s important is that regulators make sure the financial sector is resilient and that markets work well.”
Powell said the pandemic’s economic recovery “had progressed faster than generally expected and looks set to strengthen.”
However, he said the sectors of the economy hardest hit by the pandemic “remain weak” and that the unemployment rate “underestimates the deficit”, so the recovery still has a long way to go.
Treasury yields fell on Tuesday, with a ten-year Treasury yield hovering around 1.62%.
General Mills, Tencent, KB Homes and HR are among the companies that reported earnings Wednesday.