Investing.com – U.S. stocks are set to open lower Wednesday, consolidating after recent strong gains while investors fret about the potential for a second wave of the Covid-19 virus.
Wall Street has powered higher since the lows in March, helped by extraordinary levels of fiscal and monetary stimulus, and by signs of recovery as the economy reopens.
The tech-heavy Nasdaq Composite has led the way, gaining for the last eight sessions to post a record high. It’s on course for its best quarter since the fourth quarter of 1999, the height of the dot-com bubble.
The other senior indices are also posting gains. The DJIA is set for its best quarter since the first quarter of 1998 and the S&P 500 its best since the first quarter of 1975.
That’s happening even though the U.S. has now confirmed more than 2.3 million Covid-19 cases and over 121,000 related deaths, according to data from Johns Hopkins University, while several U.S. states are seeing record numbers of infections. Covid cases are growing by 5% or more in 26 of the 50 states.
The latest rise in new infections may prompt EU nations to close their borders to U.S. travelers as they seek to reopen their economies to tourism, the New York Times reported Tuesday, citing unnamed European officials.
Adding to Wednesday’s worries, the United States is considering tariffs on $3.1 billion of exports from the United Kingdom, France, Spain and Germany, Bloomberg news reported, citing a notice published by the office of the U.S. Trade Representative. This could prompt a tit-for-tat trade war, subduing economic growth.
Economic data releases are thin on the ground in the U.S. Wednesday, but signs of recovery continued in Europe as German business morale surged in June, posting the biggest rise since records started after reunification in 1990.
The International Monetary Fund will later update its forecasts for the global economy in an update of its World Economic Outlook.
In corporate news, tech giants will remain in focus, with the likes of Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) hitting fresh highs as home-bound consumers have turned to the internet and streaming services to keep busy during lockdowns.
Oil turned lower Wednesday, with investors worrying about a second consecutive week of increases in the crude oil supply.
The American Petroleum Institute estimated a large build of 1.749 million barrels for the week ended June 19 late Tuesday, much bigger than expected. Attention now turns to the government figures due at 8:30 AM ET, where a small build is expected.