Wall Street experienced its worst day in about four months on Wednesday, with all benchmark indexes falling well over 3%. Investor sentiment was damaged by fears of the second wave of the pandemic, as the number of COVID cases surged in the US and globally. Meanwhile, Democrats and Republicans failed to push a stimulus deal before the election. Also, markets are worried that President Donald Trump would contest election results in the case he loses next week. Still, at the time of writing, stock futures are rebounding, recovering over 1%.
The S&P 500 tumbled 3.53%, the Dow fell 3.43%, and the tech-oriented Nasdaq slumped 3.73%. The former two indexes saw their biggest declines since June 11.
The surge in COVID cases was the main topic of discussion among investors, as 12 US states saw record figures for hospitalized coronavirus patients. In Europe, France and Germany announced severe restrictive measures that would last at least a month.
Shares of airlines, hotels, and leisure-related firms tumbled over 4%. The S&P’s energy index also dropped over 4% along with a decline in oil prices.
The stock market’s volatility index, dubbed the fear index, surged to the highest level since mid-June.
Tech stocks couldn’t help the falling market, as Apple, Facebook, and Google, all of which should report results later today, tumbled over 4.5%.
General Electric defied the trend as its share price surged over 8% after releasing surprisingly upbeat quarterly results. Still, the GE stock is down over 30% since the beginning of the year.
CME Group stock is down over 6% after the world’s largest derivatives exchange reported quarterly revenue and earnings that missed analysts’ expectations.
Credit card giants MasterCard and Visa reported double-digit y/y declines in their revenue, with the results being greatly affected by the pandemic. The share price of MasterCard tumbled over 8% after hours, and Visa fell only 4%, as it actually topped analysts’ estimates.
The share price of UPS tumbled 8% despite the quarterly results that beat analysts’ expectations, as investors focused on lack of guidance and much higher costs. It was the worst trading day in six years for the UPS stock.
Gilead reported Q3 results that beat analyst estimates. However, the company cut its guidance on sales. The stock price rose 2% after the report, but then lost steam and is now down 2%.
Ford stock gained over 1.4% after reporting Q3 EPS and revenue that exceeded expectations.
eBay Q3 results beat analyst estimates, and the company expects Q4 sales above estimates. Still, the stock price is flashing red in after-hours trading.
Asian stocks are down in early trading on Thursday, following the US stock selloff. Still, China is recovering.
At the time of writing, China’s Shanghai Composite is up 0.51%, and the Shenzhen Component has gained 0.91%. Both indexes opened lower. About 1,000 companies are reporting on their third-quarter earnings today. Meanwhile, the Chinese Communist Party is due to release 5-year and 15-year plans discussing the country’s economic strategy as it concludes its plenum later today.
Japan’s Nikkei 225 closed 0.48% lower. The Bank of Japan has just announced its monetary policy decision and the interest rate that was unchanged.
Toyota announced yesterday that it has expanded its global fuel pump recall to 5.84 million cars for a defect that might cause the part to fail.
Hong Kong’s Hang Seng Index is down 0.42%.
South Korea’s KOSPI has dropped by 0.65%, as the government plans to close clubs in Seoul over the Halloween holiday to stop the spread of the coronavirus.
Samsung announced a 59% y/y jump in operating profit to the equivalent of $10.89 billion for the July-September quarter, in line with its previous guidance. However, the company expects a decline in profits in the three months to December due to competition in the smartphone and consumer electronics markets and weak memory chip demand.
In Australia, the ASX 200 closed 1.61% lower.
In the commodity market, oil prices are trading in the positive territory after plunging over 5% to four-month lows amid a spike in COVID cases. Also, the US Energy Information Administration said that crude inventories rose more than anticipated last week as production jumped in a record build. WTI is now trading below $38, and Brent is fluctuating below $40.
Gold is recovering after tumbling over 1.7% yesterday. Investors are seeking refuge amid new lockdowns in Europe and US election uncertainty. The metal is up 0.30% but trading well below the $1,900 mark, at $1,884.
In FX, the US dollar is losing some ground after gaining 0.50% yesterday. The greenback can’t leverage its safe-haven status several days until Election Day. The USD Index is down 0.04% to 93.368. EUR/USD is up 0.13% to 1.1757.