Asia Morning: U.S. Stocks Pressured by Resurging Virus Cases


On Wednesday, U.S. stocks lost over 2% as investors' confidence in the economic recovery was shaken by resurging coronavirus cases...

Trading floor 2

On Wednesday, U.S. stocks lost over 2% as investors' confidence in the economic recovery was shaken by resurging coronavirus cases. The U.S. recorded a one-day total of more than 36,000 new cases, the highest level since late April. California, Florida and Oklahoma reported record highs in new cases.

The Dow Jones Industrial Average tumbled 710 points (-2.7%) to 25445, the S&P 500 lost 81 points (-2.6%) to 3050, and the Nasdaq 100 was down 207 points (-2.0%) to 10002. 

Dow Jones Industrial Average: Daily Chart

Source: GAIN Capital, TradingView

Energy (-5.54%), Automobiles & Components (-4.17%) and Banks (-4.12%) sectors lost the most. 

Energy stocks such as Halliburton (HAL -8.77%) and Occidental Petroleum (OXY -9.04%) declined as oil prices plunged. Cruise companies such as Norwegian Cruise Line (NCLH -12.37%) and Royal Caribbean Cruises (RCL -11.26%) lost big. Boeing (BA -5.96%) also weighed down major indexes.  

On the technical side, about 43.1% (42.3% in the prior session) of stocks in the S&P 500 Index were trading above their 200-day moving average, and 35.3% (36.3% in the prior session) were trading above their 20-day moving average.

Later today, first-quarter GDP growth (third reading, -5.0% on quarter annualized expected), Initial Jobless Claims (a fall to 1.335 million expected) and Durable Goods Orders (May preliminary reading, +10.1%  on month expected) will be reported.

European stocks were heavy on Wednesday, with the Stoxx Europe 600 Index sank 2.8%. Germany's DAX fell 3.4%, France's CAC dropped 2.9%, and the U.K.'s FTSE 100 was down 3.1%.

U.S. government bond prices increased, as the benchmark 10-year Treasury yield declined to 0.683% from 0.712% Tuesday.

Spot gold price retreated $7.00 (-0.4%) to $1,761 an ounce halting a three-session rally.

Oil prices were dragged by worries over new coronavirus cases impeding demand recovery. They came under more pressure after the Energy Information Administration reported that crude oil stockpiles increased 1.4 million barrels to another record high level last week. U.S. WTI crude oil futures (July) slid 5.8% to $38.01 a barrel.

On the forex front, the ICE U.S. Dollar Index gained 0.6% on day to 97.21, as safe-haven demand was lifted by a resurgence in coronavirus infections across the U.S..

EUR/USD retreated 0.5% to 1.1250. The German IFO Business Climate Index climbed to 86.2 in June (85.0 expected) from 79.7 in May and Expectations Index rose to 91.4 (87.0 expected) from 80.5.

GBP/USD sank 0.9% to 1.2413.

USD/JPY bounced 0.5% to 107.06.

USD/CAD advanced 0.7% to 1.3643. Canada's credit rating was downgraded to "AA+" from "AAA" at Fitch, outlook "Stable". The rating agency said "the rating downgrade reflects the deterioration of Canada's public finances in 2020 resulting from the coronavirus pandemic".

More from Commodities


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.