Contracts on the Dow, S&P 500 and Nasdaq rocketed higher and hit their upper limits during pre-market trading.
The gains, capped at 5% in the overnight session, provided an at least brief respite after the biggest percent-drop for the S&P 500 and Dow since 1987 on Thursday.
Coronavirus concerns continue to drive market volatility, with the number of cases globally rising to more than 135,000 with more than 4,900 deaths as of Friday, according to data from Johns Hopkins. The S&P 500 has gained or lost at least 4.89% every session this week, and plunged enough during the intraday session to trigger “circuit-breakers” to help prevent further extreme losses twice.
The global outbreak, officially designated a pandemic earlier this week by the World Health Organization, has triggered widespread cancelations for major sports and cultural events and corporate conferences, and impelled universities across the country to halt in-person instruction. On Thursday, New York Governor Andrew Cuomo banned public gatherings of more than 500 people in New York state, effective Friday evening.
Amid these concerns, the response from policymakers escalated throughout the week, with the Federal Reserve adding further stimulus on top of its half-point interest rate cut last week with the announcement of an additional injection of $1.5 trillion in liquidity operations. Elsewhere, President Donald Trump announced a month-long travel ban on inbound travelers from Europe, and said he would offer billions worth of low-interest loans to small and mid-sized businesses getting hit by the coronavirus.
The escalating coronavirus outbreak has also sparked an increasing number of economists to downwardly revise their expectations for global growth in the first half of the year.
“Against this backdrop, we continue to slash 1H20 global GDP [gross domestic product] forecasts. The projection of a February China collapse and March-June recovery remains a key driver of our anticipated -1.4% global GDP drop this quarter and +1.8% rise in 2Q20,” JPMorgan economists including Bruce Kasman wrote in a note late Thursday. “However, our latest revision now forecasts a meaningful two quarter GDP contraction in both the US (-2% and -3%) and Euro area (-1.8% and -3.3%).”
7:48 a.m. ET: Stock futures surge, hitting limit up
Stock futures surged overnight, sending the indices to their upper limits to prevent further extreme gains. Contracts on each of the three major indices rose more than 5%.
Here were the main moves in markets, as of 7:46 a.m. ET:
S&P 500 futures (ES=F): 2,595, up 126 points or +5.1%
Dow futures (YM=F): 22,195.00, up 1,110 points or +5.26%
Nasdaq futures (NQ=F): 7,622.75, up 407.5 points or +5.65%
Crude oil (CL=F): $33.23 per barrel, up $1.73%
Ten-year Treasury note: yielding 0.951%, up 9.9 basis points
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