The S&P 500 and the Dow Jones Industrial Average have both lost ground, while Treasury yields have risen from a multi-day low.
Virus variations raise concerns about the economy’s recovery, while US Jobless Claims add to the bearishness.
China’s shares on the New York Stock Exchange plummeted as Beijing added to the shareholders’ woes.
With significant daily losses on Thursday, US markets reflected a cautious market sentiment. Fears of coronavirus (COVID-19) variations and higher US Jobless Claims data were buried beneath the risk aversion, not to mention the European Central Bank’s (ECB) decision to change the inflation objective.
The Dow Jones Industrial Average (DJI) fell 0.75 percent, or 259.86 points, to 34,421.93, while S&P 500 Futures fell -0.86%, or 37.31 points, to 4,320.82. Furthermore, Nasdaq fell 0.72 percent to 14,559.80 by the end of Thursday’s North American session, a decline of 105.30 points.
According to a study, the Delta variation was responsible for approximately 52% of the most recent two-week covid cases in the United States. This, combined with reports that virus strains are resistant to vaccines, has heightened market concerns. “A new spike in coronavirus infections fueled by the more virulent Delta version could cause consumers to ‘pull back’ and hinder the US recovery,” Atlanta Federal Reserve President Raphael Bostic told Reuters.
In other news, US jobless claims above the 350K prediction, with 371K revising the prior reading to 373K for the week ending July 2. Unemployment claims fell below 394.75 to 394.5 over a four-week period.
Despite the risk-off mentality, US Treasury yields fell to new multi-day lows, with the 10-year coupled falling to its lowest level since late February and the 30-year coupon falling to its lowest level in five months.
While negative mood pulled markets in China, Chinese stocks on American exchanges had another reason to fall. Following Beijing’s crackdown on DIDI for allegedly collecting user data in violation of national regulations, the dragon nation exacerbated difficulties for its stocks on US exchanges, causing Alibaba and Baidu to plummet.
With a quiet calendar ahead of them with the coronavirus (COVID-19) dominating headlines, investors may be more focused on qualitative drivers for near-term trading direction./n
