Stock futures open flat amid positive virus treatment data, debate looms

U.S. stock futures opened flat on Tuesday night after the release of coronavirus treatment data from Regeneron Pharmaceuticals while traders awaited the first presidential debate. 

Dow Jones Industrial Average futures were down just 39 points, or 0.1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}. S&P 500 and Nasdaq 100 futures also slid 0.1{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}.

After the closing bell, Regeneron said its REGN-COV2 drug reduced viral levels and improved symptoms in non-hospitalized coronavirus patients. “The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response,” Regeneron Chief Scientific Officer George D. Yancopoulos said in a statement.

Regeneron’s announcement came after concerns over a virus resurgence dampened market sentiment on Tuesday, leading to the major averages snapping a three-day winning streak. The Dow dipped more than 100 points, or 0.5{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}. The S&P 500 also closed 0.5{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} lower and the Nasdaq Composite slid 0.3{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}.

New York City Mayor Bill de Blasio said the city’s daily positive rate of coronavirus tests is back above 3{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} for the first time in months.

“Coronavirus infection rates are rising in Europe and the United States as children return to school,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, wrote in a note. “We expect the United States to continue its modest pace of economic improvement, though virus growth and a softer labor market are threats.”

Futures were kept in check as traders braced for the first presidential debate between President Donald Trump and Democratic nominee Joe Biden, which is set to start at 9 p.m. ET. Biden comes into the debate with an average lead of 6.1 percentage points in recent polls, according to RealClearPolitics.

Many market strategists have cited uncertainty around the election as a key headwind for the market before year-end with each outcome bringing its own risks and benefits. Some investors have raised concerns about a potential Biden win as they fear it could lead to higher corporate taxes and regulations. But at the same time, it could ease concerns about the trade war and lack of stimulus to bolster the economy in the wake of the coronavirus.

Investors are also worried that after the debates the race could become even closer, leaving the potential for a drawn-out election process where the Nov. 3 result is too close to call and neither candidate concedes. That uncertainty could particularly weigh on the market.

“A lot will be on the line,” Tom Block, Washington policy strategist at Fundstrat Global Advisors, said in a note to clients about the debate. “On the plus side the President is a professional entertainer and loves the camera … But the President has such confidence in his ability to debate that he is unlikely to spend much time preparing.”

Biden “will have hours of mock debate sessions and will execute a carefully thought-out strategy; while the President will go by instinct for the kill,” Block said.

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