Dow Futures, Nasdaq Rebound After Trillion Dollar Tech Rout

Wall Street looks to snap a three-day losing streak, triggered by a trillion dollar tech sell-off, despite worrying news from AstraZeneca's coronavirus vaccine trial.
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The Wednesday Market Minute

  • Global stocks mixed as Wall Street looks to snap a three-day losing streak triggered by tech's trillion-dollar slump.
  • AstraZeneca said it will pause its coronavirus vaccine study following the unexplained illness of one of its trial participants.
  • U.K. pound slides to multi-week low against the dollar after the government admits plans to breach international law with its post-EU legislation.
  • Oil prices notch modest rebound ahead of Energy Department report, but U.S. crude remains firmly under $40 a barrel.
  • U.S. equity futures suggest a firmer open on Wall Street, with the Nasdaq called around 195 points higher after falling into correction territory after last night's close.

U.S. equity futures traded higher Wednesday, while oil prices steadied and the dollar extended gains, as Wall Street looks to snap a three-day losing streak triggered by one of the largest tech stock sell-offs in several years.

The Nasdaq 100, which tracks the largest and most influential U.S. tech stocks, closed 4.77% lower Tuesday, pulling the benchmark 11% south of its September 2 record high to officially peg it in correction territory. The losses spread to nearly all sectors on Wall Street Tuesday, taking more than 630 points from the Dow Jones Industrial Average and completing the weakest three-day stretch since early March.

The bearish tone looked set to continue into today, as well, following news that AstraZeneca paused its coronavirus vaccine trial after one of its participants developed and unexplained illness.

The news sent shares in the British drugmaker sharply lower, but also reminded investors that a near-term result from one of the many vaccine candidates is unlikely, given the complexities involved and the shortened time frame demanded by lawmakers funding portions of the research.

U.S. equity futures, however, look set to claw back some of yesterday's losses, with contracts tied to the Dow indicating a 295 point opening bell gain and those linked to the S&P 500 suggesting a 44 point advance for the broader benchmark.

Nasdaq Composite futures, meanwhile, are looking at a 195 point head start Wednesday after closing 10.15% lower from its September 2 high last night, amid moves for the six largest U.S. tech stocks -- Apple  (AAPL) - Get Report, Facebook  (FB) - Get Report, Amazon  (AMZN) - Get Report, Microsoft  (MSFT) - Get Report, , Tesla  (TSLA) - Get Report and Google  (GOOGL) - Get Report -- that collectively shed more than a $1 trillion in market value. 

European stocks were also on the rise Wednesday, with the Stoxx 600 benchmark, the region's broadest measure of share prices, rising 0.75% in early Frankfurt trading, paced by gains for energy and telecoms shares. 

Britain's FTSE 100 was also getting a boost from the energy sector, as well as a weaker pound, with the benchmark rising 0.9% in early London trading. 

Oil prices were part of the energy rebound, with markets attempting to take back some of yesterday's sharp declines ahead of the U.S. Energy Department's regular sector outlook report later this morning.

WTI contracts for October delivery, the U.S. benchmark, traded 72 cents higher from their Tuesday close in New York at $37.48 per barrel in early European dealing while Brent contracts for November, the new global benchmark, were seen  55 cents higher at $40.28 per barrel.

The U.S. dollar index, which gauges the strength of the greenback against a basket of six global currency peers, was marked 0.1% higher at 93.552, thanks in part to a weaker pound, which fell to a multi-week low of 1.2948 after the British government said it would breach international law with legislation that protects itself from the potentially failed trade deal with the European Union.

Benchmark 10-year Treasury note yields, meanwhile, held at 0.674% even as investors braced for a torrent of new bond sales this month that are likely to total $253 billion, a 45% increase from the August total. 

Overnight in Asia, Wall Street's sharp sell-off hit both the Nikkei 225, which fell more than 1% to close at 23,032.54 points, a near two-week low, as well as the region-wide MSCI ex-Japan benchmark, which slumped 1% heading into the final hours of trading.