U.S. equity futures were flat in late-night trading Tuesday amid renewed investor concern over the global recovery from the coronavirus pandemic.
Dow futures rose 20 points. S&P 500 futures were up 0.08% and Nasdaq 100 futures were up 0.3%.
On Tuesday, stocks linked to an economic recovery led losses amid a surge in new coronavirus cases in the US and abroad.
The Dow Jones Industrial Average lost more than 300 points, dragged down by a 3.4% drop in Caterpillar shares. The S&P 500 fell 0.76% with significant losses from airlines and cruise ships. The Nasdaq Composite fell 1.12% as Facebook, Apple and Tesla closed lower.
The benchmark small-cap Russell 2000 index fell 3.58%, its worst day since June.
Many regions of the world are experiencing an increase in Covid-19 cases as highly contagious variants continue to spread, the World Health Organization said. Germany and France are expanding or applying new blockade measures.
Concerns about the recovery come on the first anniversary of the market crash. Stocks have rallied from the bottom of the market with the S&P 500 rebounding around 80% from a year-low low, marking the best start to a new bull market on record.
On Wednesday, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony before the US House of Representatives Committee on Financial Services. In their first joint appearance on Tuesday, the pair acknowledged the prices of highly valued assets in the markets, but said they are not concerned about financial stability.
“I would say that while asset valuations are elevated by historical metrics, there is also a belief that with vaccines advancing at a rapid pace, the economy will be able to get back on track,” Yellen said during testimony. “I think in an environment where asset prices are high, the important thing is that regulators make sure that the financial sector is resilient and that the markets work well.”
Powell said the economic recovery from the pandemic “has progressed faster than expected and appears to be strengthening.”
However, he said that the sectors of the economy most affected by the pandemic “remain weak” and the unemployment rate “underestimates the deficit”, so the recovery still has a long way to go.
Treasury yields fell on Tuesday with the 10-year Treasury yield hovering around 1.62%.
General Mills, Tencent, KB Homes and RH are among the companies that reported earnings on Wednesday.