Futures fall as investors wary of U.S. response to virus

By Medha Singh and Sanjana Shivdas

(Reuters) – U.S. stock index futures fell more than 2% on Wednesday after strong gains in the previous session, on skepticism about President Donald Trump’s stimulus plan to combat the economic impact of the coronavirus epidemic.

Expectations that Trump would announce “major” stimulus measures helped Wall Street rebound on Tuesday from a bruising sell-off on Monday as a plunge in oil prices compounded fears of a global recession.

While Trump met with fellow Republicans in the U.S. Senate on Tuesday and discussed a payroll tax cut, no concrete measures have been announced.

The rapid spread of the virus has galvanized central banks and governments to roll out measures to cushion its fallout. The Bank of England on Wednesday became the latest central bank to cut interest rates. [MKTS/GLOB]

Analysts now expect the U.S. Federal Reserve to cut rates for the second time this month when it meets next week, pressuring Treasury yields further. [US/]

Rate-sensitive U.S. lenders tumbled, with Citigroup Inc , JPMorgan Chase & Co and Morgan Stanley down between 2.2% and 3.7% in premarket trade.

At 7:27 a.m. ET, Dow e-minis <1YMcv1> were down 567 points, or 2.28%. S&P 500 e-minis were down 71.25 points, or 2.49%, and Nasdaq 100 e-minis were down 190 points, or 2.28%.

The three main stock indexes came within a hair’s breadth of confirming bear market territory, implying a drop of 20% from record highs, on Monday. The benchmark S&P 500 <.SPX> is now about 15% below its all-time high hit just three weeks earlier.

Nike fell 3.7% after rivals Adidas and Puma flagged a sales hit in China due to the coronavirus outbreak.

DXC Technology soared 15.6% after the IT and consulting services provider said it would sell its healthcare technology business to private equity firm Veritas Capital for $5 billion.

On the economic front, the Labor Department’s inflation report for February is scheduled for 8:30 a.m. ET.

Futures also shrugged off Joe Biden rolling into commanding victories in pivotal Michigan and two other states on Tuesday, taking a big step toward the Democratic Party’s presidential nomination.

(Reporting by Medha Singh and Sanjana Shivdas in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)