The Stock Market Is Falling Again as Growth and Covid Concerns Build

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Updated Aug. 19, 2021 6:18 americium ET / Original Aug. 19, 2021 5:05 americium ET

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Investor attraction is present turning to Federal Reserve Chair Jerome Powell's expected code astatine the Jackson Hole symposium adjacent week.

Win McNamee/Getty Images

U.S. banal marketplace futures were indicating a little unfastened connected Thursday, acceptable to proceed declines from Wednesday trading, arsenic the aboriginal of U.S. monetary argumentation and planetary maturation concerns related to the Covid-19 pandemic weighed connected stocks.

Futures for the Dow Jones Industrial Average were pointing down astir 340 points, acceptable for a anemic unfastened aft the scale declined 382 points connected Wednesday to adjacent astatine 34,960. Futures for the S&P 500 and Nasdaq were besides pointing to a little open.

Investors volition ticker to spot whether U.S. stocks volition recover, aft the S&P 500 declined much than 1% connected Wednesday to station its largest one-day nonaccomplishment successful a month. Analysts noted that the communicative from the past trading league remained broadly unchanged arsenic markets moved into cogwheel Thursday.

Concerns person centered connected revelations from the July gathering minutes of the Federal Reserve’s monetary policy-making committee. Broader worries astir planetary economical growth, particularly successful the look of the much contagious Delta variant of coronavirus, besides dampened connected capitalist sentiment.

The minutes of the Federal Open Market Committee suggested that the cardinal slope could statesman slowing its monolithic monthly plus purchases—a pandemic-era measurement to adhd liquidity to fiscal markets—as soon arsenic this year.

“The signifier for scaling backmost enslaved purchases is seemingly confirmed—a theoretical framework, past a determination taken successful the 4th quarter, past enactment successful the 4th fourth oregon aboriginal 2022,” said Paul Donovan, the main economist astatine UBS Global Wealth Management.

“The Fed is scaling backmost due to the fact that it is independent, and the motive for buying bonds was to proviso needed liquidity. That liquidity is little needed, truthful enslaved buying is little needed,” Donovan added.

Read: Fed Minutes Suggest Tapering of Bond Purchases Could Begin Later This Year

Michael Hewson, an expert astatine broker CMC Markets, noted that Wednesday’s worries—especially astir the Delta variant—have lingered, and weighed connected Thursday trading successful Asia and Europe.

“Further weakness successful Asia markets implicit expanding uneasiness astir China’s regulatory crackdown arsenic good arsenic the uncertainty implicit rising Delta cases looks acceptable to provender into further uncertainty arsenic we look towards a little European open,” Hewson said.

“Attention volition present crook to adjacent week’s Jackson Hole cardinal slope symposium, which markets volition anticipation offers further clues astir timelines to a taper/slowdown successful the gait of monthly plus purchases,” Hewson added. The large Wyoming symposium should springiness investors their adjacent large accidental to work into the Fed’s stance connected monetary policy.

In Asia, Hong Kong’s Hang Seng declined 2.13% portion the Shanghai Composite slipped 0.57% and Tokyo’s Nikkei 225 dipped 1.1%. The FTSE 100 successful London was 2.2% little arsenic the pan-European Stoxx 600 fell adjacent 2%. The CAC 40 successful Paris moved 2.8% into the reddish and Frankfurt’s DAX dropped 1.8%.

Commodities besides took a beating. Futures contracts for copper, 1 of the astir important concern metals and a barometer for planetary economical sentiment, fell astir 3% to widen declines crossed the past period to 10%. Benchmark Brent crude was changing hands astatine conscionable supra $66 a barrel, down 3%.

In the time ahead, investors tin expect economical information successful the signifier of archetypal jobless claims for past week and continuing jobless claims for the week of Aug. 7, arsenic good arsenic the Philadelphia Fed manufacturing scale for August.

On the net front, results are owed from Estée Lauder, Kohl’s, Macy’s, Li Auto, NetEase, Applied Materials, and others.

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