Dow futures tumble 700 points on fears over new COVID variant detected in South Africa

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U.S. banal futures were heavy successful the reddish aboriginal Friday, tracking dense losses successful Asian markets aft scientists detected a caller COVID variant successful South Africa that could beryllium the blasted for a caller melodramatic spike successful cases.

Investors are returning to a shortened time of trading pursuing the Thanksgiving Day holiday.

How are stock-index futures trading?
  • S&P 500 futures ES00, -1.52% fell 1.6% to 4,624
  • Dow Jones Industrial Average futures YM00, -1.92% slumped 721 points, oregon 2%, to 35,025
  • Nasdaq-100 futures NQ00, -0.83% fell 0.8% to 16,222

On Wednesday, the Dow industrials DJIA, -0.03% fell 9.42 points to decorativeness astir level astatine 35,804.38. The S&P 500 SPX, +0.23% slipped 0.2% to adjacent astatine 4,701.46, conscionable 0.1% beneath its Nov. 18 grounds adjacent of 4,704.54, according to Dow Jones Market Data. The Nasdaq Composite Index COMP, +0.44% roseate 0.4% to 15,84.23.

What’s driving the market?

The find of the caller COVID variant was announced connected Friday by South Africa’s wellness curate Joe Phaahla. He said scientists were acrophobic due to the fact that of its precocious fig of mutations and the melodramatic spike successful infections the state had seen implicit the past 4 oregon 5 days.

Speaking astatine an online property conference, helium said the variant, presently known arsenic B.1.1.529, had besides been detected successful Botswana and Hong Kong successful travelers who had visited South Africa, helium said. The World Health Organization’s method moving radical is holding an exigency gathering to measure the variant, which scientists stlil aren’t definite whether is much deadly oregon conscionable much contagious.

“The 1 bull successful the China store that could genuinely derail the planetary betterment has ever been a caller strain of Covid-19 that swept the satellite and caused the reimposition of wide societal retractions,” said Jeffrey Halley, elder marketplace analyst, astatine OANDA, successful a note. “All we cognize truthful acold is the B.1.1.529 is heavy mutated but markets are taking nary chances.”

After caller cases appeared to stabilize astatine 200 a day, South Africa reported much than 1,200 connected Wednesday and 2,465 connected Thursday. Scientists and wellness officials are acrophobic that specified a highly mutating variant could flight vaccines. The U.K. authorities is banning flights from the state on with 5 different African nations, effectual Friday.

As banal futures tumbled and stocks successful Asia slumped, with the Nikkei 225 scale NIK, -2.53% falling an outsize 2.5%, investors flocked to perceived safer assets specified arsenic golden GC00, +1.06% GCZ21, +1.06%, which jumped $14 to $1,798.30, the Japanese yen USDJPY, -1.02% up 0.7% to 114.50, and authorities bonds. The output TMUBMUSD10Y, 1.537% connected the 10-year U.S. Treasury slid 9 ground points to 1.5517%.

U.S. crude prices CL00, -4.06% CLF22, -4.06% slumped 3% to $75.90 a tube connected perceived fears of falling request amid the caller variant.

“For the infinitesimal it is understood that the fig of cases is small, but owed to the bladed liquidity levels successful Asia trading arsenic a effect of the US vacation the absorption does look to beryllium outsize, with a surge into bonds, sending yields plunging, and golden higher,” said Michael Hewson, main marketplace expert astatine CMC Markets.

Investors are returning from the Thanksgiving Day interruption to a shortened league for U.S. markets, which is often accompanied by thinner volumes arsenic traders often hold until Monday to return. There is nary economical information connected the calendar for Friday. But the week had been simmering with concerns astir rising COVID cases successful Europe and caller restrictions.

Fear of a caller variant was overshadowing the Black Friday buying day, which puts the absorption connected retailers arsenic consumers store for bargains.

Read: Facing the biggest ostentation surge successful 30 years, shoppers expect to walk a batch much this vacation season

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