Dow futures plummet more than 500 points after two days of losses

Stock futures fell in early morning trading on Thursday as investors evaluate the pace of economic recovery and the coronavirus developments.

Futures on the Dow Jones Industrial Average fell 578 points, implying a Thursday opening drop of around 592 points. S&P 500 and the Nasdaq 100 futures also pointed to sizable losses at the Thursday open for the two indexes.

The moves in futures followed two straight days of losses for the 30-stock Dow and S&P 500 as investors ditched reopening trades for the megacap tech names. The S&P 500 dipped 0.5% on Wednesday, and the Dow slid about 280 points. Meanwhile, the Nasdaq Composite climbed 0.7% to a record closing high of 10,020.35, also its first-ever close above 10,000.

The Nasdaq has risen for eight days in the past nine sessions, bringing its 2020 gains to nearly 10%. The S&P 500 is down 1.2% this year after briefly turning green for 2020 earlier this week. The Dow is down 5.4% for 2020.

Concerns about a second wave of coronavirus cases have risen as U.S. states push deeper into reopening. Texas has reported three consecutive days of record-breaking Covid-19 hospitalizations. Nine California counties are reporting a spike in new coronavirus cases or hospitalizations of confirmed cases, AP reported Wednesday.

On Wednesday, investors assessed the Federal Reserve’s updates on the economy and monetary policy. The policymakers voted unanimously to keep interest rates unchanged and indicated no rate increases through 2022. 

“The Fed understands we are just in the beginning phases of the economic recovery and making rash changes to policy or forward guidance is premature at this time,” Charlie Ripley, senior investment strategist for Allianz Investment Management, said in an email.

The Fed also said it will at least maintain the current pace of bond purchases for the coming months. Additionally, it expects the U.S. economy to contract by 6.5% in 2020 before expanding by 5% in 2021. 

Investors are awaiting the new jobless claim data for the week ending June 6, which is set to come out at 8:30 a.m. ET on Thursday. Economists polled by Dow Jones expect filings for unemployment insurance claims to total 1.595 million last week, which is down from 1.775 million in the week before. 

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