US pre-open: Futures put a halt to three-day rout despite vaccine setback
Wall Street futures had stocks opening higher ahead of the bell on Wednesday, putting a halt to a sell-off started late last week that ended with the Nasdaq entering correction territory.
As of 1230 BST, Dow Jones futures were up 0.31%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.56% and 1.51% firmer, respectively.
The Dow closed 632.42 points lower on Tuesday as tech stocks took a beating on the first day of trading for the week and continued on with their worst performance since March.
Wednesday's positive moves came despite news that AstraZeneca's late-stage trial of its Covid-19 vaccine candidate had been paused as a result of a suspected serious adverse reaction in a participant.
Oanda's Craig Erlam said: "The overnight news on the AstraZeneca/Oxford University vaccine could have caused a stir in these markets but investors appear to have taken it for what it currently is, a minor setback that may quickly resolved. Of course, that depends on the results of the investigation into the adverse reaction experienced by one volunteer.
"Granted, these markets have been very reactive to vaccine developments over the months so it's perhaps surprising just how easily this has been shrugged off. That said, good news is more powerful than bad, particularly when there's so many vaccine candidates out there. And as I've already said, this is still only a temporary setback. If it turns out to be worse than that, maybe it will knock sentiment a little."
Also in focus, Democratic presidential candidate Joe Biden proposed a new offshoring penalty that would lead to a 28% corporate tax rate, plus a 10% "offshoring penalty surtax" on profits made by a US company overseas for sales back to the US. He also called for a 10% tax credit for companies that make investments that create jobs for American workers and a 21% minimum tax on all foreign earnings.
On the macro front, mortgage applications rose 2.9% in the week ended 4 September, according to the Mortgage Bankers Association, the first rise in almost a month. The refinance index also ticked up 3% and homebuyer mortgage applications went up 2.6%.
Still to come, JOLTs job openings figures for July will be published at 1500 BST.
In corporate news, Tiffany shares slumped ahead of the bell after Louis Vuitton parent LVMH announced that it would not complete its takeover of the jeweller, while athletic retailer Lululemon and instant messaging platform Slack both fell in extended trading despite posting stronger-than-expected earnings.