US open: Stocks turn red as Trump warns of 'very painful' few weeks
US stocks opened lower on Wednesday, continuing on from the losses recorded at the end of the Dow's worst first quarter in history.
As of 1540 BST, the Dow Jones Industrial Average was down 2.67% at 21,331.47, while the S&P 500 was 2.93% weaker at 2,508.74 and the Nasdaq Composite started out the session 2.22% softer at 7,528.80.
The Dow opened 585.69 points lower on Tuesday, following on from losses seen in the previous session as market participants shrugged off some strong manufacturing data out of China and wrapped up the volatile quarter, which saw the blue-chip index lose more than 23% of its value in the first three months of 2020.
Donald Trump said on Tuesday that the US should brace for a "very, very painful two weeks" as a result of the rampant coronavirus. White House officials projected between 100,000 and 240,000 virus-related deaths in the country.
"This is going to be a rough two-week period," Trump said. "When you look at night the kind of death that has been caused by this invisible enemy, it’s incredible."
Trump also proposed another $2trn stimulus package, this time focused on infrastructure spending. However, it remained unclear as to whether or not it would pass Congress.
Oanda's Craig Erlam said: "Of course, when the President of the United States warns of a 'very, very painful two weeks' to come, with the White House anticipating between 100,000 and 240,000 deaths as a result of the coronavirus, it's understandable for investors to be shaken. This was always the risk of last week's rebound and we must now hope that quarantine measures bring that number considerably down.
"This is a huge change in tone from the President who has failed to grasp the true horror of the coronavirus in the past, repeatedly claiming it will be defeated very soon. As we enter a rapid acceleration phase in the US which brings enormous uncertainty, the bullish case for stock markets is a little weak and we could see the rally quickly run out of steam. We can only hope the next two weeks aren't nearly as bad as we now fear, on all accounts."
Global Covid-19 cases have now reached 862,234, while US deaths have topped 4,000.
On the macro front, total mortgage application volume increased 15.3% last week, driven entirely by refinancing, according to the Mortgage Bankers Association.
However, mortgage rates plummeted to their lowest level in the history of the MBA's survey, with the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreasing to 3.47% from 3.82%.
Elsewhere, private sector employment eased in the US last month, according to data released by consultancy ADP on Wednesday. March's 27,000 slide in total US non-farm private employment compared to a gain of 179,000 in February. The March data beat consensus, comfortably beating expectations for a fall of around 150,000.
However, the data was collated ahead of the introduction of more stringent lockdown measures introduced to tackle the Covid-19 outbreak.
Still on data, US manufacturing activity in March fell at its fastest pace since August 2009, with the Covid-19 outbreak continuing to batter businesses.
The reading for the index came in at 48.5, down from 50.7 in February, according to IHS Markit, as both domestic and foreign demand continued to fall as companies shuttered factories and laid off staff.
Lastly, a key gauge of US manufacturing sector conditions for March printed ahead of forecasts but sentiment around the near-term growth prospects for the economy were described as "strongly negative". There were also abundant reasons to believe that the hit to activity in the sector was being understated due to the way that the gauge was calculated.
The Institute for Supply Management's manufacturing sector Purchasing Managers' Index fell from a reading of 50.1 for February to 49.1 in March (consensus: 46.0).
In the corporate space, Dave & Busters will report earnings on Wednesday.