Stock futures held steady overnight trading on Monday after the S&P 500 fell for the first time a year ago since 2016.
Futures on the Dow Jones Industrial Average fell 10 points. S&P 500 futures remained stable and Nasdaq 100 futures declined less than 0.1%.
The futures moves came after a sharp sell-off on Wall Street to kick off 2021. The S&P 500 was down 1.5%, posting its worst daily performance since October 27. Ten of the 11 S&P 500 sectors posted losses, led by real estate. .
The blue-chip Dow lost 382 points after dropping a whopping 700 points at its lowest point of the day. The Nasdaq Composite was down 1.4% while the FAANG block collapsed all the way to start the new year.
The wide market sell-off occurred ahead of Tuesday’s elections in Georgia, which will determine whether Republicans can retain control of the Senate. Meanwhile, rising Covid-19 cases worldwide and new lockdown restrictions continued to keep investors on their toes.
“Investors are feeling troubled this week,” Lindsey Bell, lead investment strategist at Ally Invest, said in an email. COVID cases continue to increase, with a new variant of the virus spreading around the world. Tomorrow’s runoff races in Georgia could determine the make-up of the Senate, and the market has generally outperformed in a split. Congress.”
Many fear that higher tax rates and more progressive policies could become a reality if Democrats take control of the Senate. However, such a result could create an opportunity for a larger and faster spending package, which will help support the market.
“Even if the Democrats gain control, the margin will be remarkably thin and analysts are skeptical about whether a meaningful shift in tax or regulatory policy is possible,” Mark Hackett, Nationwide’s head of investment research, said in a note. “Democratic scrutiny, however, could spark another round of coronavirus incentives and possibly an infrastructure package.”
On Monday, England imposed a third coronavirus lockdown as the region grapples with a more transmissible variant of Covid-19. New York State has confirmed its first case of the new species, Governor Andrew Cuomo said Monday.
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