A violent reversal in Treasury yields in response to a potential $1 trillion stimulus package helped to unnerve investors.
Around 6:42 a.m. ET, futures on the Dow Jones Industrial Average indicated a more than 1,000-point loss at Wednesday’s open. S&P 500 and Nasdaq-100 futures were also down. Futures contracts for the indices were in “limit down” territory, a situation where trading is halted after futures have hit a 5% loss and can go no lower. The S&P 500 gained 6% on Tuesday.
Exchange-traded funds that track the indexes are not subject to limit-down restrictions, however, and suggested what the open would look like. The SPDR S&P 500 ETF was down 6% in premarket trading, the SPDR Dow Jones Industrial Average ETF was down 6.5%, and the Invesco QQQ Trust was off 5.8%.