Stock futures fell slightly in overnight trading on Monday, following a steep rebound in the previous session, as investors grew more hopeful that the peak in coronavirus cases could be reached soon.
Futures on the Dow Jones Industrial Average dipped about 40 points, implying a 100-point loss at Tuesday’s open. The S&P 500 and the Nasdaq futures also traded slightly lower.
Stocks surged on Monday as a slew of coronavirus headlines pointed to a potential stabilization in the U.S. The Dow soared 1,600 points, posting its third biggest point gain ever. The S&P 500 jumped 7% to its highest level since March 13. With Monday’s rally, the S&P 500 bounced about 20% from its 52-week low on March 23.
Investors were soothed by data over the weekend that shows a slowing in the number of daily U.S. coronavirus cases, although it is still early to determine a lasting trend. Death tolls in some of the world’s coronavirus hot spots, including Spain and Italy, showed signs of easing. New York state, the hardest-hit region in the U.S., also reported its first decline in daily confirmed deaths on Sunday.
“The apex in New York state is likely imminent as opposed to one month out,” Marko Kolanovic, JPMorgan’s global head of macro quantitative and derivatives strategy, said in a note on Monday. “Big data indicated very early on that social distancing is working overall.”
Amid Monday’s rally, Wall Street’s fear gauge the Cboe Volatility Index fell 3.3% to 45.24, the lowest level in about two weeks. Three weeks ago, the VIX hit a record high of 82.69, surpassing the peak level during the financial crisis.
Still, the cases in the U.S., the world’s most affected country, topped 347,000 with at least 10,000 deaths, according to data from Johns Hopkins University.
“We still believe that the odds are quite high that the lows from March will be retested and probably undercut before this bear market comes to an end,” Matt Maley, chief market strategist at Miller Tabak, said in a note on Monday.
Stocks are still in bear-market territory with the S&P 500 about 21.5% off its record high. Many on Wall Street believe stocks haven’t fully priced in the potential corporate earnings collapse as the coronavirus outbreak have virtually shut down the global economy.
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