scorecardGlobal stocks stumble on fears of economic recovery losing momentum, while bitcoin continues to plummet
  1. Home
  2. cryptocurrency
  3. news
  4. Global stocks stumble on fears of economic recovery losing momentum, while bitcoin continues to plummet

Global stocks stumble on fears of economic recovery losing momentum, while bitcoin continues to plummet

Shalini Nagarajan   

Global stocks stumble on fears of economic recovery losing momentum, while bitcoin continues to plummet
CryptocurrencyCryptocurrency3 min read
  • US stock futures fell Wednesday, as markets stayed 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.
  • Bitcoin continued 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.

Futures linked to the Dow Jones were down 0.5%, while those on the S&P 500 dropped 0.4%, and the Nasdaq lost 0.3% as of 4:20 a.m. ET, suggesting a lower start to trading later in the day.

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 crypto wallet to solve glitches in its official launch of the token as legal tender. Some analysts said bitcoin's drop can be attributed to a "buy leading up to the big event, sell the fact" reaction.

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.

London's FTSE 100 fell 1.1%, the Euro Stoxx 50 fell 1.4%, and Frankfurt's DAX fell 1.5%.

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.

Tokyo's Nikkei rose 0.8%, but the Shanghai Composite fell 0.04%, and Hong Kong's Hang Seng lost 0.5%.

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.

Read More: The 'Wolf of All Streets' trader explains how he passively earns about $1,000 worth of bitcoin a month and pays $108 in electricity by mining remotely