US pre-open: Futures have stocks bouncing back following massive sell-off in previous session

Wall Street futures were pointing to strong gains ahead of the bell on Friday following one of the sharpest sell-offs since the peak of the Covid-19 pandemic fuelled rout in March during the previous session.

As of 1250 BST, Dow Jones futures were down 2.29%, while S&P 500 and Nasdaq-100 futures had the indices opening 1.90% and 1.56% firmer, respectively.

The Dow Jones closed 1,861.82 points lower on Thursday as stocks closed sharply in the red on amid an increased number of new Covid-19 cases in states emerging from lockdowns.

Fears of an emerging second wave of cases in the US were still very much so in focus on Friday, with Texas and Arizona facing rising infections and the likes of Arizona, Utah and New Mexico all posted rises in new cases of 40% or higher, while Florida, Arkansas, South Carolina and North Carolina all reporting jumps of more than 30% in the week ended 7 June.

While futures were pointing to solid gains before the open, Naeem Aslam at AvaTrade suspects the movements were nothing more than a "dead cat bounce" and pointed to a statement from the International Monetary Fund's chief economist that said "the scars" of the Covid-19 pandemic "may linger for much longer".

However, Treasury Secretary Steven Mnuchin told CNBC that the White House would not consider shutting down the economy again bit did stated he was prepared to return to Congress and request additional fiscal spending in order to help the economy if need be.

"We have the Fed program, we have Main Street, which is going to be now up and running, and we're prepared to go back to Congress for more money to support the American worker," he said. "So we’re going to get everybody back to work. That's my number one job working with the president and we're going to do that."

Investors were also digesting news that UK gross domestic product had contracted by an all-time high of 20.4% in April.

On the corporate front, hard stocks from the previous session like Carnival and United Airlines were both up more than 8% ahead of the bell, while retailers Kohl's and the Gap were both higher before the open.

In macro news, the University of Michigan's preliminary consumer sentiment index will be published at 1500 BST.