Futures on the Dow Jones Industrial Average dropped 242 points. S&P 500 futures slid 0.66% and Nasdaq 100 futures were near flat. The market’s rally to records slowed down in recent days as more immediate concerns about the worsening pandemic overshadowed optimism toward a viable vaccine.
The U.S. seven-day average of daily new Covid-19 infections now stands at 161,165, according to a CNBC analysis of John Hopkins data, 26% higher than a week ago. Many states have rolled back reopening plans and implemented fresh restrictions to curb the spread.
Meanwhile, Treasury Secretary Steven Mnuchin is seeking to end a handful of the Fed facilities that bought corporate bonds as well as the Main Street Lending Program targeted towards small- and medium-sized businesses. The move has drawn pushback from the central bank, which said the programs continue to serve an important role to support the vulnerable economy.
People familiar with the matter told CNBC’s Steve Liesman, however, that either Mnuchin or a new Treasury secretary from the Biden administration could decide to revive the emergency lending programs under a new agreement with the Fed.
“Mnuchin’s move will tighten financial conditions and removes a safety net for markets at the wrong moment,” Krishna Guha, Evercore ISI vice chairman and head of global policy and central bank strategy, said in a note on Thursday.
Investors also digested signs that lawmakers could resume talks over a new Covid-19 relief bill amid the worsening pandemic. Sen. Chuck Schumer, D-N.Y., said Thursday that Senate Majority Leader Mitch McConnell, R-Ky., has agreed to restart negotiations.