Virus fears lead futures lower after strong quarterly rebound

Via Reuters Finance

FILE PHOTO: Traders wear masks as they work on the floor of the New York Stock Exchange in response to the outbreak of the coronavirus disease (COVID19) in the Manhattan borough of New York, U.S., May 27, 2020. REUTERS/Lucas Jackson

(Reuters) – U.S. index futures dipped on the last trading day of the second quarter on Tuesday as coronavirus-related worries and simmering U.S.-China tensions weighed on sentiment at the end of what is expected to be the S&P 500’s best quarter since 1998.

The benchmark index has rebounded about 18% since April on a raft of fiscal and monetary stimulus and the easing of restrictions, but is still down about 5% on the year as a resurgence in coronavirus cases raises fears of another round of lockdowns.

With California and Texas marking a record spike in cases on Monday, investors are counting on more stimulus to shore up the domestic economy.

Federal Reserve Chair Jerome Powell, who is due to testify before the U.S. House of Representatives Financial Services Committee at 12:30 p.m. ET, said in prepared remarks that the outlook for the world’s biggest economy was “extraordinarily uncertain”.

Sino-U.S. tensions are also heating up again with Washington beginning to eliminate Hong Kong’s special status under U.S. law in response to China’s national security law on the territory. China said on Tuesday it would retaliate.

Meanwhile, kicking off a data-heavy week for Wall Street, consumer confidence is expected to have climbed to 91.8 in June from 86.6 in May. Data on manufacturing activity and employment are due on Wednesday and Thursday.

READ ALSO  Seeking deliverance - FedEx tries to think beyond the pandemic | Business

At 6:57 a.m. ET, Dow e-minis 1YMcv1 were down 66 points, or 0.26%, S&P 500 e-minis EScv1 were down 4.5 points, or 0.15% and Nasdaq 100 e-minis NQcv1 were down 6.25 points, or 0.06%.

In company news, Micron Technology Inc jumped 5.3% in premarket trading as it forecast higher-than expected current-quarter revenue on higher demand for its chips that power notebooks and data centers.

Uber Technologies Inc (UBER.N) rose 3.1% after reports said the ride-hailing services company was in talks to buy food-delivery app Postmates.

Reporting by Pawel Goraj in Gdansk; Editing by Arun Koyyur