U.S. Stocks Set To Open Lower On Worries About The Second Wave Of COVID-19S&P 500 futures are losing ground in premarket trading as traders fear that the surge of coronavirus in Europe may lead to new lockdowns.
Virus Fears Put Pressure On Stocks
S&P 500 futures are losing more than 1.5% during the premarket trading session as traders are worried about the second wave of coronavirus.
European countries are struggling to contain the virus, and new measures are implemented on a daily basis. Today, UK was in spotlight as England’s Chief Medical Officer Chris Whitty shared his view on the upcoming restrictions that would be necessary to contain the virus.
While the UK has not made a decision on the exact set of additional anti-coronavirus measures, Whitty stated that COVID-19 would be a six-month problem and that it was very likely that the virus would benefit from autumn and winter. Obviously, this is not what traders wanted to hear about the virus.
Commodities Also Fall On Virus Worries
WTI oil is back to the $40 level despite the support from the hurricane season in the U.S. and OPEC’s determination to ensure full compliance with the production cut deal.
Oil is set to be the main victim of a potential second wave of lockdowns in case such measures are implemented in Europe.
Gold and silver are also losing ground as virus worries provide support to the U.S. dollar. The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has managed to return above the 20 EMA at 93.10 and is trying to gain more upside momentum.
Stronger dollar is bearish for precious metals as it makes them more expensive for buyers who have other currencies. If the U.S. dollar manages to continue its upside move, gold and silver prices will fall.
Weakness of S&P 500 futures and strong U.S. dollar create a bearish setup for commodity-related stocks at the beginning of today’s trading session.
Oracle Makes A Deal With ByteDance
U.S. President Donald Trump stated that he gave Oracle‘s deal with ByteDance his blessing so TikTok will not be blocked in the U.S.
A successful ending of the TikTok story could have provided more support to the market but traders are too focused on the second wave of the virus.
However, Oracle investors will not miss the news since Oracle shares are up about 4% in premarket trading despite the global market sell-off.
For a look at all of today’s economic events, check out our economic calendar.