US stocks will be in focus today, ahead of the producer price index data scheduled for release later in the day.
Context: US stocks closed lower on Tuesday, amid investor concerns around a second wave of infections. South Korea and China have already reported some cases of this. As restrictions are eased in the US and people return to work, there are chances of a surge in new COVID-19 cases.
Details: Over the weekend, around six people tested positive for COVID-19 in Wuhan, China, where the virus initially emerged. The Hubei province had not recorded any new cases for the past month.
Geopolitical tensions also dampened market sentiment yesterday, following reports that the Trump administration is considering delisting Chinese companies from US stock exchanges.
Economic data continued to highlight the dark side of the pandemic-related lockdowns, with the US reporting its steepest monthly decline in consumer prices since 1957. The country’s core consumer prices were down by 0.4% in April, versus expectations of a 0.2% decline. The Federal government also recorded a budget deficit of $737.9 billion for April, versus a surplus of $160 billion in the same month last year.
The Nasdaq 100 snapped the trend of gains over the past six consecutive sessions and declined 2.06% to end the day at 9002.55 on Tuesday. The Dow fell 457.21 points to settle at 23764.78, while the S&P 500 was down by 2.05% at 2870.12.
Shares of GrubHub spiked around 29% after reports of Uber Technologies being interested in acquiring the food-delivery firm. Tilray’s stock fell around 8%, after the company posted a wider-than-expected quarterly loss.
In commodity news, WTI (West Texas Intermediate) crude for June rose 8% to end at $25.78 a barrel on the NYMEX (New York Mercantile Exchange), while May gold gained 0.5%, to settle at $1,704.40 an ounce.
What to watch: Investors continue to monitor the COVID-19 cases, with the total number of infections exceeding 4,262,790 globally. The number of positive COVID-19 cases in the US has surpassed 1,369,960 with around 82,380 deaths.
Markets await the producer price report from the US. Producer prices for final demand, which declined 0.2% in March, are expected to fall 0.5% in April.
Other Markets: European indices were trading lower at 9:00 am GMT, with the FTSE 100, German 30 and Italy’s FTSE MIB down by 1%, 1.3% and 1.2%, respectively.