Dow futures give up early gains and turn negative after lawmakers agree to $2 trillion coronavirus package

Stock-index futures have been bouncing around Wednesday morning

U.S. stock-index futures were trading lower Wednesday morning, relinquishing early gains seen when lawmakers reached an agreement on a roughly $2 trillion coronavirus rescue package, aimed at helping dampen the economic blow from the deadly pandemic that has seized up business activity in much of the country.

How are benchmarks performing?

Futures for the Dow Jones Industrial Average US:YMM20 were bouncing around and most recently trading 213 points, or 1%, lower at 20,422, those for the S&P 500 index US:ESM20 were down 45.10 points, or 2%, to 2,391.25, and Nasdaq-100 futures US:NQM20 retreated 125.25 points, or 1.7%, to 7,432.75.

On Tuesday, the Dow US:DJIA rose 2,112.98 points, or 11.37%, to close at 20,704.91, the S&P 500 index US:SPX advanced 209.93 points, 9.38%, to close at 2,447.33, and the Nasdaq Composite Index US:COMP gained 557.18 points, or 8.12%, ending trading at 7,417.86.

For the year to date though, the Dow is down 27.45%, the S&P 500 has lost 24.25%, and the technology-heavy Nasdaq is 17.33% lower.

What’s driving the market?

Lawmakers reached on deal in principal on a $2 fiscal stimulus package to help minimize the impact of the coronavirus outbreak after a marathon session with Senators and officials from President Donald Trump’s administration led by U.S. Treasury Secretary Steven Mnuchin. The Senate is expected to pass the bill at around noon Wednesday, according to reports.

However, passage of the bill into law isn’t without its challenges. House Speaker Nancy Pelosi needs to get the bill passed unanimously by the 435 representatives, which may present a hurdle, according to Politico.

Still, the legislation would inject some $2 trillion into the U.S. economy, including financial said for individuals and families, additional unemployment-insurance, and loans to small and medium-size businesses.

Investors are still worried that the coming negative economic data and updates on the global pandemic which originated in Wuhan, China in December and has infected 425,000 people and killed nearly 19,000, as of Wednesday morning.

“We do not see the Bear hibernating just yet” wrote Peter Cardillo, chief market economist at Spartan Securities, in a daily research note, referring to the drop of at least 20% for the major stock indexes, which meets the commonly accepted definition for a bear market.

In U.S. economics reports, a reading of long-lasting, or durable, goods will be released at 8:30 a.m. Eastern Time, a report on house prices from the FHFA will hit at 9 a.m., and a report on business uncertainty and expectations may be watched for clues on economic sentiment at 11 a.m. amid the coronavirus outbreak.

How are other markets trading?

In bond markets, the yield on the 10-year U.S. Treasury note BX:TMUBMUSD10Y were little changed at 0.83%.

Crude oil rose, with the price of a barrel of West Texas Intermediate crude US:CL were down 36 cents, or 1.5%, at $23.66 a barrel. In precious metals, gold US:GCJ20 was off $25.70, or 1.6%, at $1,635.10 an ounce, a day after searching 6%.

The Stoxx Europe 600 XX:SXXP was up 0.8%.

In Asia overnight, stocks closed sharply higher, with the China CSI 300 XX:000300 up 2.7%, Hong Kong’s Hang Seng Index HK:HSI adding 3.8% and Japan’s Nikkei 225 JP:NIK surging 8% after a 7.1% gain the previous session.

The U.S. dollar traded lower on Wednesday, compared with a basket of its major peers. The ICE U.S. dollar index US:DXY was down 0.6%.