Futures tracking the blue-chip Dow index, which
mainly comprises stocks reliant on a steady economic recovery,
were down 1.6% at 6:51 a.m. ET at their lowest level since July
20.
Energy shares including Chevron and Exxon Mobil led declines in
premarket trading, while industrials Boeing Co and Caterpillar
Inc slipped 1.8% and 1.9%, respectively. [O/R]
Wall Street's main indexes have been hurt this month by fears of
potentially higher corporate tax rates denting earnings and an
uneven labor market recovery. The benchmark S&P 500 is on track
to snap a seven-month gaining streak.
All eyes on Wednesday will be on the Fed's policy meeting, where
the central bank is expected to lay the groundwork for a
tapering, although the consensus is for an actual announcement
to be delayed until the November or December meetings.
[nL1N2QI1L8]
"In the run-up to Fed meetings, investors are nervous,
volatility rises, then the Fed surprises dovishly and volatility
declines again," analysts at Berenberg wrote in a note.
"Given that the market has been well prepared for bond purchases
to be curtailed and that they are not likely to be immediate, we
would expect a similar pattern this time as well."
The CBOE volatility index, known as Wall Street's fear gauge,
hit its highest level in two months.
S&P 500 e-minis fell 57.5 points, or 1.3%, and Nasdaq 100
e-minis lost 152.75 points, or 1%.
Global markets including commodities have also been on edge
recently over deepening troubles at China Evergrande, the
world's most indebted property developer. [MKTS/GLOB]
[nL1N2QM02L]
Economy-linked banking stocks including Morgan Stanley, JPMorgan
Chase & Co and Bank of America Corp slid between 2.2% and 3%,
tracking U.S. Treasury yields. [US/]
A slate of U.S.-listed Chinese stocks including Weibo Corp,
Bilibili Inc, Vipshop Holdings Ltd and Pinduoduo Inc shed
between 3.4% and 5.4% amid a widening regulatory crackdown in
China.
Cruiseliners, slid about 3%, while carriers United Airlines,
American Airlines and Delta Airlines dropped 2% as rising
COVID-19 cases stoked fears of a delayed recovery in travel
demand.
(Reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru;
Editing by Arun Koyyur and Maju Samuel)
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