U.S. Stocks May See Early Sell-Off Amid New Covid Variant

wallstreet sept17 26nov21 lt

With trading resuming following the Thanksgiving Day holiday on Thursday, stocks are likely to come under pressure in early trading on Friday. The major index futures are currently pointing to a sharply lower open for the markets, with the Dow futures down by 809 points.

The downward momentum on Wall Street comes following reports a new and possibly vaccine-resistant coronavirus variant has been detected in South Africa.

The news, which comes amid a surge in new Covid-19 cases in Europe, has raised concerns the pandemic could continue to wreak havoc on the global economy.

The U.K. has issued a temporary ban on flights from six African countries in reaction to the new variant, which has also been detected in Israel and Hong Kong.

The World Health Organization will hold a "special meeting" to discuss if the heavily mutated strain will become a variant of interest or a variant of concern.

An early sell-off on Wall Street may be exacerbated by below average volume, as some traders are likely to remain away from their desks ahead of an early close by the markets.

A lack of major U.S. economic data may also keep traders on the sidelines ahead of next week's closely watched monthly jobs report.

Stocks moved to the downside early in the session on Wednesday but showed a notable turnaround over the course of the trading day. The major averages climbed well off their early lows, with the Nasdaq and the S&P 500 closing in positive territory.

The Nasdaq rose 70.09 points or 0.4 percent to 15,845.23 and the S&P 500 inched up 10.76 points or 0.2 percent to 4,701.46. Meanwhile, the Dow bounced well off its worst levels but still closed down 9.42 points or less than a tenth of a percent at 35,804.38.

In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan's Nikkei 225 Index plunged by 2.5 percent, while Hong Kong's Hang Seng Index plummeted by 2.7 percent.

The major European markets have also shown significant moves to the downside on the day. While the French CAC 40 Index has shown a 3.9 percent nosedive, the German DAX Index and the U.K.'s FTSE 100 Index are down by 3.1 percent and 3 percent, respectively.

In commodities trading, crude oil futures are plummeting $4.35 to $74.04 a barrel after edging down $0.11 to $78.39 a barrel on Wednesday. Meanwhile, after inching up $0.50 to $1,784.30 an ounce in the previous session, gold futures are jumping $19 to $1,803.30 an ounce.

On the currency front, the U.S. dollar is trading at 113.86 yen versus the 115.36 yen it fetched on Thursday. Against the euro, the dollar is valued at $1.1290 compared to yesterday's $1.1209.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT