By Peter Nurse
Investing.com - U.S. stocks are seen opening sharply lower Wednesday, weighed by fears of additional lockdowns as coronavirus cases surge, while the earnings season continues apace.
At 06:20 AM ET (1120 GMT), S&P 500 Futures traded 46 points, or 1.4%, lower, the Dow Futures contract fell 485 points, or 1.8%, while Nasdaq 100 Futures dropped 121 points, or 1.1%.
The Dow Jones Industrial Average is already down nearly 3% on the week, giving up all of its gains for October, while the S&P 500 and Nasdaq Composite indices sit at three-week lows.
The second wave of the Covid-19 pandemic has hit the northern hemisphere hard, with many countries in Europe posting record daily infection levels, while nearly half a million people in the United States have contracted the virus in the last seven days, according to a Reuters tally.
This has resulted in increased fears that fresh lockdowns will be reintroduced, something European countries are on the verge of implementing, potentially stifling the nascent economic recovery.
In France, President Emmanuel Macron will give a televised address later Wednesday, amid local reports his government has been exploring a new, national lockdown from midnight on Thursday. German Chancellor Angela Merkel is due to meet state premiers to discuss closing restaurants and bars, while the Belgian government will convene on Friday to decide on a potential new national lockdown. Spain has already announced a state of emergency for six months.
This comes as President Donald Trump acknowledged on Tuesday that a coronavirus economic relief deal wouldn’t arrive before the Nov. 3 election, with the two sides unable to bridge differences over the size and scope of the package.
The earnings season continues at a frantic pace Wednesday, with the likes of United Parcel Service (NYSE:UPS), General Electric (NYSE:GE), Mastercard (NYSE:MA) and Boeing (NYSE:BA) reporting before the bell, and Ford (NYSE:F), eBay (NASDAQ:EBAY) and remdesivir maker Gilead Sciences (NASDAQ:GILD) after the close.
The tech sector will also be in focus after Microsoft's (NASDAQ:MSFT) healthy third-quarter numbers, helped by growth at its cloud computing business, while the CEOs of Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOGL) and Twitter (NYSE:TWTR) are expected to testify before the Senate Commerce Committee.
Oil prices slumped Wednesday, as a jump in U.S. crude stocks, coupled with the potential damage to demand from the sharp increase in Covid-19 cases, raised worries about a supply glut.
Investors now await data from the Energy Information Administration, due later in the day, while the arrival of Hurricane Zeta, which is expected to make landfall in Louisiana later Wednesday, will also be in focus.
U.S. crude futures traded 4% lower at $38.00 a barrel, while the international benchmark Brent contract fell 3.2% to $40.30.
Elsewhere, gold futures fell 1% to $1,892.75/oz, while EUR/USD traded 0.5% lower at 1.1739.