The Dow Jones futures plummeted quite terribly yesterday. However, today, it has gained almost 300 points on its way to recovery.
The coronavirus is still a major problem not just health-wise, but for financial markets as well. All of the uncertainty, fear and doubt stemming from the outbreak which started last year, has caused very visible effects on the world’s stock markets. Yesterday, stocks crashed badly, signifying the market’s worst plunge in 2 years. Now, a rise can be observed as the market including Dow Jones futures has gained back some weight.
Dow Jones Futures Begin Weight Loss Reversal
Futures have generally begun swelling again, however slowly. Futures on both S&P 500 and NASDAQ are rearing their heads, with Dow Jones futures doing the same as well. Specifically and somewhat overnight, Dow Jones futures already gained 266 points.
A few market analysts have expressed that they are not exactly surprised. For the S&P 500, records show that pretty much all the times the index dropped up to 3%, it again bounced back favorably. In fact, one report states that Bespoke Investment Group researchers say that it has been this way for the last 11 years. Specifically, whenever the S&P 500 dropped by over 2%, it is shortly followed by good rebounds.
Yesterday’s Dow Jones Futures Crash
Dow Jones futures lost 800 points, it’s worst fall since February 2018. The S&P 500 crashed 3.3% as well, also it’s worst in about 2 years. The crash for both indexes completely erased all of the weight gained in 2020. All analysis and research pointed to the coronavirus COVID-19, as the major reason for the plunge.
The outbreak originated in China and has been ravaging the country for a long time. However, things seemed to get worse when cases outside of China began to increase in number and severity. This, amongst other things, is responsible for the Dow Jones crash.
As if this isn’t bad enough, analysts have piled on the bad news. Market players are currently seeing that there’s a chance for a further drop, culminating in a loss up to 25%. This is because so far, the virus has not been contained and the spread is still raging. This means that there’s a chance that the epidemic will get considerably worse which will have further negative effects on financial markets.
Affected Stocks
Mastercard Inc (NYSE: MA) has reduced its revenue because of the uncertainty surrounding the outbreak. Visa Inc (NYSE: V) stock along with a few other payment processing companies, also lost in the market. For Apple Inc (NASDAQ: AAPL) and Alphabet Inc (NASDAQ: GOOGL), they both failed their 50-day moving averages. Also, Tandem Diabetes Care Inc (NASDAQ: TNDM) crashed as well.
Moderna Inc (NASDAQ: MRNA) recently announced that it has a vaccine for the coronavirus and is looking to begin testing it. Its own stock jumped.
Japan’s Nikkei fell more than 3% With the S&P/ASX 200 in Australia, losing 1.6%. The Kospi in South Korea fell 4% yesterday but had begun reversing the crash with a 1.1% increase. The FTSE MIB in Italy also lost 0.8%.