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U.S. equity futures were flat in overnight trading on Tuesday, as investors again feared a global recovery from the coronavirus pandemic.
Dow futures rose 20 points. S&P 500 futures gained 0.08% and Nasdaq 100 futures gained 0.3%.
On Tuesday, actions related to an economic recovery led to the losses amid rising new coronavirus cases in the United States and abroad.
The Dow Jones Industrial Average lost more than 300 points, dragged down by a 3.4% drop in the Caterpillar stock. The S&P 500 fell 0.76% with significant losses from airlines and cruise lines. The Nasdaq Composite fell 1.12% as Facebook, Apple and Tesla all closed lower.
The benchmark Russell 2000 small cap index fell 3.58%, its worst day since June.
Many parts of the world are seeing an increase in Covid-19 cases as highly contagious variants continue to spread, the World Health Organization has said. Germany and France extend or apply new lockdown measures.
Concerns about the recovery come on the first anniversary of the market bottom. Stocks have rebounded from the market bottom, with the S&P 500 rising about 80% from a year-ago low, marking the best start to a new bull market on record.
Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony before the US House Committee on Financial Services on Wednesday. In the first joint appearance on Tuesday, the pair acknowledged the prices of the richly valued assets in the markets, but said they did not care about financial stability.
“I would say that if asset valuations are elevated by historic measures, there is also the belief that with vaccinations going at a rapid pace, the economy will be able to get back on track,” said Yellen during the testimony. “I think in an environment where asset prices are high, what’s important for regulators is to make sure the financial sector is resilient and to make sure the markets are functioning well.”
Powell said the economic recovery from the pandemic had “progressed faster than expected and appears to be strengthening.”
However, he said the sectors of the economy hardest hit by the pandemic “remain weak” and the unemployment rate “underestimates the deficit,” so the recovery still has a long way to go.
Yields on Treasuries plunged Tuesday with the yield on 10-year Treasuries hovering around 1.62%.
General Mills, Tencent, KB Homes and RH are among the companies that report their results on Wednesday.
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