Stock futures reversed in early morning trading Tuesday as oil prices bounced off their lows following an unprecedented wipeout.
Futures on the Dow Jones Industrial Average fell about 193 points, implying an opening drop of about 244 points. S&P 500 futures and Nasdaq futures also pointed to lower Tuesday opens for the indexes.
The moves came as President Donald Trump said he would sign an executive order to temporarily suspend immigration to the United States to protect jobs “in light of the attack from the Invisible Enemy.” Millions of Americans have filed for unemployment benefits as the coronavirus pandemic shuts down economic activity in much of the country.
Trump’s tweet did not provide specifics on what the order would entail.
Meanwhile, the more actively-traded June oil contract rebounded by 4.85%. The May contract, which triggered Monday’s stock sell-off with a bizarre move below zero into negative prices, also recovered and remained in positive territory.
IBM slipped 3.08% in extended trading after the company reported a 3.4% decline in revenue in the first quarter from a year ago amid the spread of coronavirus. Coca-Cola, Netflix and Chipotle are on deck to report earnings on Tuesday.
Stocks dropped on Monday to start another likely volatile week, with the Dow falling nearly 600 points, as an unprecedented plunge in oil prices weighed on investor sentiment. West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, highlighting just how much demand has collapsed due to the coronavirus pandemic.
Still, the international benchmark Brent crude and the June WTI contract both were still above $20 per barrel. The June contract, which fell 18% to settle at $20.43 on Monday, is a better reflection of the reality in the oil market.
Also on Monday, the Senate failed to reach a deal on the next package to rescue an economy and health care system ravaged by the global pandemic. However, a vote is set up as soon as Tuesday afternoon to replenish a key small business aid program.
Investors continued to monitor the coronavirus pandemic and the country’s plan to reopen the economy. Signs have emerged that New York is past the worst of its outbreak. Georgia on Monday rolled out aggressive plans to reopen the state’s economy, calling for many businesses to reopen their doors as early as Friday.
Stocks enjoyed their first back-to-back weekly gains since early February as investors grew more optimistic that the pandemic is easing off. The S&P 500 is now about 17% from its record high on Feb. 19, cutting about half of its losses during the coronavirus sell-off.
“Market volatility remains intense, as subtle changes in the tone of the news drives dramatic shifts in investor sentiment,” said Mark Hackett, Nationwide’s chief of investment research. “Markets rallied sharply last week on hope that the worst of the outbreak is behind us. This optimism is likely to face headwinds, as the reopening of the economy is heading for an intense debate.”
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