Market Snapshot: Dow futures drop over 500 points to join in global equity selloff

Major U.S. benchmarks have suffered three consecutive weekly losses. The Dow DJIA, -0.87%  fell 244.56 points Friday, or 0.9%, to end at 27,657.42, dragging the blue-chip gauge to a 0.03% weekly decline. The S&P 500 SPX, -1.11%  and the tech-heavy Nasdaq Composite COMP, -1.07%  each s2000 aw a weekly fall of 0.6%.

The small-cap Russell Index RUT, -0.37%  found favor, however, logging a 2.6% rally last week.

What’s driving the market?

Futures saw losses intensify as European equities tumbled, a move that came as a rising number of COVID-19 cases across several countries sparked fears of renewed restrictions on activity. European banks fell sharply after Buzzfeed News and other outlets published articles alleging that the world’s most powerful banks continued doing business with customers they suspected of engaging in money laundering and other illicit activities.

Investors are also weighing the potential market implications of the death of Supreme Court Associate Justice Ruth Bader Ginsburg, which appeared set to spark an intense battle over the nomination of her successor, complicating an already bitter presidential election race and further clouding prospects for an agreement on a new round of fiscal stimulus to shore up a U.S. economy.

President Donald Trump on Saturday said he would announce a nominee soon, while Democrats contend the winner of the Nov. 3 election should choose the nominee after the Republican-led Senate in 2016 used that rationale to block a nomination by Barack Obama following the death of Associate Justice Antonin Scalia.

Read:Biden to senators: Extinguish the ‘flames’ engulfing U.S. politics by not ‘jamming’ through a Supreme Court justice

“Both sides of the political spectrum were energized by the president’s actions only complicating the already volatile U.S. election landscape. Indeed with economic data stalling the story in the markets could turn to geopolitical risk which by its very nature suggests far more volatile price action in week’s ahead,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management, in a note.

Tech-related stocks, which had led the market’s rally back from the March pandemic lows, have flagged in recent weeks, leading the market back down from all-time highs.

Which companies are in focus?

• Shares of electric truckmaker Nikola Corp. NKLA, +1.06%  dropped nearly 30% in premarket trade after founder Trevor Milton resigned as executive chairman following allegations by a short seller the company had misled investors about its technology.
• Oracle Corp. ORCL, -0.71%  shares were up 4% in premarket action after Trump on Saturday said he had given his “blessing” to a proposed deal that would see the company and Walmart Inc. WMT, -1.02%  take over U.S. operations of Chinese-owned app TikTok. Walmart shares were up more than 1%.

What are other markets doing?

The yield on the 10-year Treasury note TMUBMUSD10Y, 0.661%  fell 2.8 basis points to 0.66%. Bond prices move inversely to yields.

The ICE U.S. Dollar Index DXY, +0.38%, which tracks the performance of the greenback against its major rivals, was up 0.4%.

Gold futures GCZ20, -1.25% were down 1.3% at $1,937.30 an ounce. The U.S. crude oil benchmark CL.1, -1.99%  fell 2.1% to $40.24 a barrel

The Stoxx Europe 600 Index SXXP, -2.86%  dropped 2.7%, while the U.K.’s benchmark FTSE UKX, -3.64% was down 3.3%. In Asia, Hong Kong’s Hang Seng Index HSI, -2.06% fell 2.1% and the Shanghai Composite Index SHCOMP, -0.63%  fell 0.6%, while Japan’s Nikkei NIK, +0.17% was closed for a public holiday.