Global stocks stumble on fears of economic recovery losing momentum, while bitcoin continues to plummet
- US stock futures fell Wednesday, as
marketsstayed cautious after a choppy session the previous day.
- Investors may be concerned that post-pandemic recovery may be less exuberant than expected, an analyst said.
Bitcoincontinued Tuesday's sell-off after El Salvador became the first country to make it legal currency.
US stock futures fell sharply Wednesday as investors witnessed a sell-off across multiple asset classes, with markets taking a cautious tone as confidence in the prospects for a strong post-pandemic recovery appeared to falter.
The declines follow a choppy session Tuesday that saw the losses for the Dow and the S&P 500, but a small gain for the tech-heavy Nasdaq. Mega-cap tech stocks put in a strong performance as the FANG+ index rose 1.4% to another record high, spurred by Netflix's 2.74% jump and Tesla's 2% rise to its highest level in four months.
Concerns about the economic impact of the Delta coronavirus variant appear to be weighing on investors as they watch the Federal Reserve for hints on when it will wind down stimulus.
"It appears that US markets are concerned about the hoped-for post-pandemic recovery being somewhat less exuberant than hoped," said Jeffrey Halley, a senior market analyst at Oanda.
A US job openings print above 10 million later Wednesday might just do the trick, he added. The JOLTS report is due at 10 a.m. ET.
Fears that central banks may begin to taper their asset purchases seem to have knocked away a little confidence, Deutsche Bank strategists said. Investors expect to see the start of that process with the European Central Bank's monetary policy decision on Thursday, with inflation in the eurozone at its highest level in almost a decade.
The dollar index, which measures the greenback against a basket of six currencies, rose 0.05% to a one-week high of 92.56 on Wednesday. Yield on the benchmark 10-year Treasury note ended Tuesday's session 5.1 basis points higher at 1.385%, the highest closing level in nearly two months.
Reddit darling GameStop is due to report second-quarter results after the market close. Analysts polled by FactSet expect the gaming retailer to post a net loss of 67 cents a share and a quarter-on-quarter drop in sales to about $1.23 billion.
Bitcoin continued Tuesday's sell-off, falling 13% to $45,212, according to data from CoinDesk, after El Salvador reportedly said it had to disconnect its
Elsewhere, the UK government increased a tax on earnings to fund higher spending on health and social care, after the pandemic hit provision and public finances.
In Asia, Japan's economy grew 1.9% in the second quarter, faster than the 1.3% expected. But slowing domestic consumption and prospects for fiscal stimulus continue to dominate as issues, according to Oanda's Halley.
Renewed concerns about demand have weighed on oil, but analysts said say prices could find support in high production outages in the Gulf of Mexico. Brent Crude climbed 0.2% to around $72 a barrel, and West Texas Intermediate rose 0.3% to $68 a barrel.
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