New COVID Concerns Pressure Stock Market
As the week winds down, a new wave of COVID concerns grips worldwide markets. In Europe, preventative measures seem to be getting harsher and harsher, with new lockdowns a definite possibility. However, one bright spot comes from the technology sector, which keeps consistently outperforming expert expectations.
On Friday, futures for the major indexes suffered as the concerns pushed down markets. The Dow Jones Industrial Average was close to opening 100 points lower than on the previous day. The S&P 500 did similarly percentage-wise, indicating a solid loss after a record-high day on Thursday. However, Nasdaq, which we know as the most tech-comprised index, actually trended the opposite way, displaying growth of 0.4%.
In Hong Kong, the Hang Seng index also demonstrated a relatively steep decline of about 1.1%. The primary reason for that was the sudden downtrend of Alibaba, the online e-commerce giant. The drop was somewhat unexpected, following a slight incline on Thursday. Still, the drop wasn’t catastrophic, and there’s some basis for a potential recovery soon.
In Europe, where the COVID concerns loom, the indexes seem relatively calm. The Pan-European Stoxx 600 only dropped by 0.1%. However, that may paint a deceptive picture of the markets being more steadfast than they actually are. Namely, before the concerning news struck, both European and US indexes were trending significantly higher.
The concerns struck when Germany and Austria announced they’d be tightening COVID restrictions. Germany said that there’s no way of ruling out the possibility of a future lockdown. In Austria, things are already steeper than that, with a lockdown scheduled to start on Monday. The lockdown is on a national level and would last up to 20 days, followed by a necessary vaccine by February 2022. Considering how major the news is, the market didn’t react too explosively, indicating that investors are getting used to COVID worries.
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