Dow Jones futures took a nosedive on Monday as jittery investors showed anxiety on news of China reporting a sizable increase of coronavirus cases for the first time in nearly 50 days, reports Forbes.
The Dow Jones Industrial Average futures fell 370 points, or 1.4 percent on Sunday evening, while the S&P 500 futures also lost 1.4 percent, with the Nasdaq Composite ceding 1.0 percent.
Earlier, 11 June witnessed a shock stock market sell-off over concerns about a flare-up in COVID-19 cases, with Friday registering a modest bouncing back of major indexes.
The sobering plunge came after last week’s rally, when on 8 June, the Nasdaq Composite surged to a record high, breaking above 10,000 for the first time on the potential benefits of the economy reopening after the coronavirus lockdown.
The Dow Jones Industrial Average had also closed last Monday at 27,272.30 after a six-session winning streak.
The current fall comes as investors are increasingly concerned amid the spiking infection rate in the US and talk of a second wave of the respiratory virus, with the possible lockdown in Beijing over new cases deemed as a major threat.
With volatility predicted to surge still further, all riskier assets have fallen out of favour, writes the outlet.
On Monday, oil prices plunged massively, with Brent crude down 53 cents, or 1.37 per cent, at $38.20 a barrel.
West Texas Intermediate crude fell 82 cents, or 2.29 percent, to trade at $35.43 per barrel.
“The recovery in oil demand is already set to be a lengthy process, and a fresh wave of cases will certainly raise worries that a recovery in demand may take even longer than initially thought,” Warren Patterson, ING’s head of commodities strategy said in a note.
Investors are also failing to stake on gold, the safe-haven asset, over fears of a repeat of the developments in March that forced large institutions to sell gold positions to dodge margin calls.
The outlet writes that although investors are concerned over a possible second lockdown, many experts believe a global shutting down of the economy again is unlikely, and predict that news about a potential coronavirus vaccine could embolden the stock market.
As its share price slid 5.5 percent in early trading in London on Monday, the multinational oil and gas company BP said in a press release on 15 June that benchmark Brent crude prices would average at $55 a barrel between next year and 2050.
Gas prices were also revised downwards, with a drop of around 30 percent on previous forecasts.
BP CEO Bernard Looney acknowledged in a statement that all signs were that COVID-19 would have an “enduring economic impact.”
"We have reset our price outlook to reflect that impact and the likelihood of greater efforts to 'build back better' towards a Paris-consistent world,” said Looney.
As BP downgraded its oil price expectations for the coming decades on forecasts that the coronavirus health crisis might boost a shift towards greener energy, it suggested this would result in a write-down of between $13 billion and $17.5 billion (£13.9 billion) in is earnings for the second quarter.
Last week, in a webcast to employees, Looney said:
“The oil price has plunged well below the level we need to turn a profit. We are spending much, much more than we make.”
The developments came as China, where the coronavirus pandemic originated in the city of Wuhan in December, registered 57 new coronavirus cases in the past 24 hours, the country's National Health Commission said on Sunday.
Out of the 57 new cases, 38 are local while 19 are imported.
The country's total number of confirmed coronavirus cases now stands at 83,132, with a death tally of 4,634.
The total number of recovered individuals in China stands at 78,369.
As the new cluster of COVID-19 cases was detected, on Saturday Beijing authorities announced they had shut down one of the city's largest wholesale food markets after 45 people linked to the market tested positive for the coronavirus.
Authorities have locked down 11 residential communities near the Xinfadi market.
China had relaxed most of its anti-virus controls after the ruling Communist Party declared victory over the disease in March.