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U.S. stock-index futures early Friday traded slightly lower to end a week that has left technology stocks sharply higher but the rest of the market stuck in a range as uncertainty over the economic outlook in the era of COVID-19 has deflated appetite for assets considered risky.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, -0.48% fell 68 points, or 0.3%, at 25,507; those for the S&P 500 index ES00, -0.40% retreated 7.10 points, or 0.2%, at 3,134; while Nasdaq-100 futures NQ00, -0.29% gave up 12 points to reach 10,715.50, a decline of 0.1%.
On Thursday, the Dow DJIA, -1.38% closed 361.19 points, or 1.4%, to end at 25,706.09; the S&P 500 index SPX, -0.56% lost 17.89 points, or 0.6%, at 3,152.05; while the Nasdaq Composite Index COMP, +0.52% closed up 55.25 points, or 0.5%, at 10,547.75, marking its second record in a row and its 26th of 2020.
For the week, the Dow is on pace to finish with a 0.5% decline, the S&P 500 is on track to book a weekly return of 0.7%, while the Nasdaq was set for a 3.3% advance over the five-session period, as of Thursday’s close.
What’s driving the market?
Market participants remain skittish about the path forward for risk assets and were scooping up government bonds on Friday, as cases and hospitalizations continued to rise from the infection caused by the novel strain of coronavirus.
The U.S. saw a record number of new infections of COVID-19, rising by more than 63,000 to mark another single-day record, as hospitals in Texas, California and other states also saw rising hospitalizations from the illness, the Wall Street Journal reported.
Total cases of coronavirus climbed to more than 3.1 million and the death toll topped 133,000, according to data compiled by Johns Hopkins University.
The illness also is seeing a resurgence in certain parts of the world. Specifically, Australia, India, and South Korea are seeing increased social-distancing measures or reimplemented lockdown measures.
Meanwhile, in China, a streak of gains for the week, that had been sparked by bullish comments from a state-run paper, cooled to close out a rally in the region, as government officials issued warnings of overexuberance in state-owned media.
”The futures are lower as the China rally loses steam and investors rethink the recovery,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a daily research note.
Separately, China said that it would impose reciprocal sanctions against U.S. officials after the U.S. imposed sanctions on individuals and institutions for human rights abuses of Uighurs, a mostly Muslim ethnic minority living in China’s Xinjiang province.
Meanwhile, investors are bracing for corporate earnings, which will kick off in earnest next week, with the banking sector slated to deliver quarterly results that are likely to be disappointing.
Against that backdrop, the 10-year Treasury yield TMUBMUSD10Y, 0.585% was trading at around 0.588%, around its lowest level since April. Bond yields falls as prices rise.
