Market Snapshot: Stock-index futures fall as Trump issues grim warning on coronavirus pandemic

Stock-index futures pointed to a lower start for stocks Wednesday after the U.S. market logged its worst quarterly performance since 2008, as President Donald Trump warned that a “very, very painful” two weeks lies ahead as the COVID-19 pandemic continues.

What are major indexes doing?

Futures on the Dow Jones Industrial Average YM00, -3.84% fell 743 points, or 3.4%, to 21,008, while S&P 500 futures ES00, -3.85% dropped 86 points, or 3.4%, to 2,483. Nasdaq-100 futures NQ00, -2.92% were off 213 points, or 2.7% at 7,573.

Stocks ended lower on Tuesday, capping a quarter that saw stocks tumble from February records into a bear market at record speed. The Dow DJIA, -3.70% logged a 23.2% quarterly fall, its biggest first-quarter drop on record and biggest quarterly decline since 1987. The S&P 500 SPX, -3.73% fell 20% for its biggest quarterly selloff since the final three months of 2008. The Nasdaq Composite COMP, -2.96% fell 14.2% for the quarter.

Read:Here’s how the stock market tends to perform after brutal quarters

What’s driving the market?

A continued rise in COVID-19 cases in the U.S. and around the world weighed on equities, with Trump warning late Tuesday that a “very, very painful” two weeks lies ahead for the country. The White House released new projections for 100,000 to 240,000 deaths in the U.S. from the coronavirus pandemic even if current social distancing guidelines are maintained.

See:Dow faces crucial April test as coronavirus pandemic brings ‘blizzard of bad news’

The number of COVID-19 cases world-wide rose to 862,234 on Wednesday, while the number of deaths rose to 42,404 according to data from Johns Hopkins Unviversity. The U.S. has the most number of cases world-wide, at 189,633, and 4,081 deaths.

“The grim situation world-wide makes it inevitable that major economies will suffer a severe downturn and the prospect of a prolonged period of business shutdowns is likely to weigh on equity markets for at least the next few weeks, if not months,” said Raffi Boyadjian, senior investment analyst at XM, in a note.

The U.S. labor market continued to see growing cracks as businesses curtailed hiring and shed workers. Automatic Data Processing reported the U.S. economy lost 27,000 private-sector jobs in March, though the data is expected to be of little use in predicting the official unemployment numbers due on Friday due to distortions created by the pandemic.

The Institute for Supply Management’s March U.S. manufacturing index due at 10 a.m. Eastern is expected to fall to 44% from 50.1% in February. A reading below 50 indicates a contraction in activity.

Meanwhile, expectations are growing for another round of fiscal stimulus following the passage last week of a $2 trillion relief package.

As Washington considers other steps for responding to the coronavirus pandemic and the resulting economic damage, Trump and House Speaker Nancy Pelosi both have suggested a “Phase 4” package could include spending on infrastructure.

Which companies were in focus?

Xerox XRX, -2.22% Xerox dropped its $35 billion hostile bid for HP Inc. HPQ, -6.62% , saying it was prioritizing its response to the outbreak over all other considerations.

Shares of Whiting PetroleumWLL, +1.58% were down 12% in premarket trading after the oil-driller said it reached an agreement with some of its bondholders to pursue a financial restructuring. Low crude prices have put oil companies under pressure, raising the likelihood that the U.S. energy sector will see a spate of defaults.

How did other markets trade?

Government bond yields extended their drop, with the yield on the 10-year U.S. Treasury TMUBMUSD10Y, -10.91% tumbling 9.1 basis points to 0.608%.

Oil prices traded near depressed levels, with the price of a barrel of West Texas Intermediate crude oil CLK20, -0.29% for May delivery down 26 cents to about $20.22 on the New York Mercantile Exchange. In precious metals, gold GCJ20, -0.16% for June delivery rose $2.90, or 0.2%, to trade at $1,586.30 an ounce on Comex.

The U.S. dollar DXY, +0.58% rose 0.7% against a basket of its major trading partners, according to the ICE U.S. Dollar index.

European stocks traded sharply lower, with the STOXX Europe 600 index SXXP, -3.22% down more than 3.2%. In Asia overnight, stocks reported similar losses. The China CSI 300 000300, -0.30% was down 0.3%, and Japan’s Nikkei 225 NIK, -4.50% booked a 4.5% decline on Wednesday.