US stock futures fell sharply late Sunday, indicating global stocks may be headed for another volatile week as investors grapple with the ongoing effects of the coronavirus pandemic.
Dow futures dropped 314 points, or 1.2%. S&P 500 futures fell 1.2%, and Nasdaq futures were down 0.6%.
For weeks, Wall Street appeared increasingly disconnected from the rest of the world — big stock gains seemed incongruous with relatively high unemployment numbers and other data showing the real economy is struggling.
But last week, markets caught up with reality. On Thursday, all three indexes posted their biggest sell-offs since March. The indexes recovered somewhat Friday, but not enough to recoup the losses they recorded last week.
As much of the United States begins to reopen following coronavirus lockdowns, scientists and health experts are warning about the potential for a second wave of the virus, which could have devastating effects for the economy. Several US states that reopened weeks ago are now reporting a rising number of infections and hospitalizations.
A second wave could undermine the extreme optimism about the economy that had catapulted US stocks toward record highs.
Asia, meanwhile, dipped lower to start the week.
Japan’s Nikkei dropped 0.5% in morning trade Monday. South Korea’s Kospi lost 0.4%. Hong Kong’s Hang Seng Index and China’s Shanghai Composite shed 0.6% and 0.1%, respectively.
“Nerves around a second wave persist in the background,” wrote Stephen Innes, chief global markets strategist at AxiCorp, in a research note Monday.
The Asia Pacific region has some of its own concerns about a resurgence of coronavirus. Authorities in China, for example, are racing to stop a potential second wave after dozens of coronavirus cases popped up in Beijing.
Oil also moved lower. US oil futures on Monday tumbled more than 3%, trading at $34.96 per barrel. Brent, the global oil benchmark, lost more than 2% to $37.71 per barrel. Both contracts plunged more than 8% last week amid concerns of a resurgence of the pandemic.