U.S. stock futures were flat in early morning trading Wednesday amid renewed investor concern about the global recovery from the coronavirus pandemic.
Dow futures dipped 29 points. S&P 500 futures traded below the flatline while Nasdaq 100 futures rose.
On Tuesday, stocks tied to an economic recovery led the losses amid rising new coronavirus cases in the U.S. and abroad.
The Dow Jones Industrial Average lost more than 300 points, dragged down by a 3.4% drop in Caterpillar’s stock. The S&P 500 fell 0.76% with major losses from airlines and cruise lines. The Nasdaq Composite dropped 1.12% as Facebook, Apple and Tesla all closed lower.
The small-cap benchmark Russell 2000 fell 3.58%, for its worst day since June.
Many regions of the world are seeing rising Covid-19 cases as highly contagious variants continue to spread, the World Health Organization said. Germany and France are extending or enforcing new lockdown measures.
Concerns about the recovery come on the one-year anniversary of the market bottom. Stocks have rebounded from the market bottom with the S&P 500 rallying about 80% since the low one year ago, marking the best start to a new bull market on record.
On Wednesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony to the U.S. House Committee on Financial Services. In the first joint appearance Tuesday, the pair acknowledged the richly valued asset prices in the markets, but said that they are not concerned about financial stability.
“I’d say that while asset valuations are elevated by historical metrics, there’s also belief that with vaccinations proceeding at a rapid pace, that the economy will be able to get back on track,” Yellen said during the testimony. “I think that in an environment where asset prices are high, that what’s important is for regulators to make sure that the financial sector is resilient and to make sure that markets work well.”
Powell said that the economic recovery from the pandemic had “progressed more quickly than generally expected and looks to be strengthening.”
However, he said that the sectors of the economy hardest-hit by the pandemic “remain weak” and the unemployment rate “underestimates the shortfall,” so the recovery still had a long way to go.
Treasury yields dipped on Tuesday with the 10-year Treasury yield hovering around 1.62%.