US open: Stocks slump as new coronavirus cases surge
Wall Street stocks opened lower on Wednesday as market participants digested trade rumours and an ever-increasing number of new Covid-19 cases.
As of 1530 BST, the Dow Jones Industrial Average was down 1.36% at 25,801.58, while the S&P 500 was 1.21% weaker at 3,093.34 and the Nasdaq Composite started out the session 0.83% softer at 10,046.84.
The Dow Jones opened 354.52 points lower on Wednesday, reversing gains recorded in the previous session as, despite comments made by White House trade advisor Peter Navarro that initially indicated that the US-China phase one trade deal was "over", the Nasdaq Composite notched a new record high.
Market participants were also keeping a keen eye on trade news between the US and the EU after a report from Bloomberg suggested that Washington was planning to slap £3.1bn worth of tariffs on various exports from the UK, France, Germany and Spain - including olives, beer, gin and trucks. The report comes just a day after Navarro's comments that the US-China trade deal was "over" sent a shockwave across the Street.
Focus was also firmly on increased numbers of new Covid-19 cases across the States, with the health side of things back front-and-centre on investors' minds what with monetary and fiscal liquidity already seen as being factored into markets for the short-term.
Data from Johns Hopkins University revealed that the US seven-day average of coronavirus cases had surged more than 30% week-on-week after the total number of cases grew more than 31,000 on Monday.
Oanda's Craig Erlam said: "Stock market sentiment is being tested on Wednesday, as a rising number of coronavirus cases combined with US tariff threats against Europe drag heavily on risk appetite.
"The rising number of coronavirus cases we're continuing to see in the US, in particular, is a major concern despite the Trump administrations previous refusal to lockdown the economy again. I imagine there will be significant resistance to restrictions being reimposed but the fear is that they are left with no other option and the recent trends we're seeing in the data is a worry."
In terms of macro data, total mortgage application volume fell 8.7% last week, according to the Mortgage Bankers Association.
However, homebuyer mortgage applications have now surged for five consecutive weeks, due to pent-up demand from March and April and a coronavirus-induced desire by more consumers to find more space and escape urban apartments
Elsewhere, the Federal Housing Finance Agency's monthly Us housing price index rose 0.2% month-on-month and 5.5% year-on-year in April.
Still to come, Federal Reserve heads Charles Evans and James Bullard will deliver speeches at 1730 BST and 2000 BST, respectively.