U.S. stock futures were unchanged in early morning trading on Wednesday as investors renewed concern over the global rebound from the coronavirus pandemic.
Dow futures fell 29 points. S&P 500 futures traded below the flatline while Nasdaq 100 futures rose.
On Tuesday, stocks tied to an economic recovery led to losses on rising new coronavirus cases in the US and abroad.
The Dow Jones Industrial Average lost more than 300 points, hurt by a 3.4% drop in Caterpillar shares. The S&P 500 fell 0.76%, with airlines and cruise lines taking significant losses. The Nasdaq Composite fell 1.12% as Facebook, Apple and Tesla all closed lower.
The small-cap benchmark Russell 2000 fell 3.58% on its worst day since June.
There are increasing cases of Covid-19 in many regions of the world as highly contagious variants continue to spread, according to the World Health Organization. Germany and France are extending or enforcing new lockdown measures.
Concerns about the recovery come on the one year anniversary of the market bottom. Stocks bounced back from the market lows, with the S&P 500 gaining around 80% since the lows a year ago, making it the best start to a new bull market in history.
Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony before the US House Committee on Financial Services on Wednesday. When they first appeared together on Tuesday, the pair acknowledged the highly valued asset prices in the markets but said they are not concerned about financial stability.
“I would say that while the valuation of assets is increased by historical metrics, there is also a belief that with rapid vaccinations the economy can get back on track,” Yellen said during the testimony. “I think in an environment with high asset prices, it is important that regulators make sure that the financial sector is resilient and that markets are functioning well.”
Powell said the economic recovery from the pandemic “has advanced faster than generally expected and appears to be strengthening”.
However, he said the economic sectors hardest hit by the pandemic “remain weak” and the unemployment rate “underestimates the deficit,” so the recovery still has a long way to go.
Government bond yields fell Tuesday, with 10-year government bond yields at 1.62%.
General Mills, Tencent, KB Homes and RH are among the companies posting profits on Wednesday.