U.S. stock futures pointed to slight gains at the open on Wednesday, following recent weakness in markets aggravated by oil’s massive decline.
Dow futures rose 45 points, indicating a gain of about 67 at the Wednesday open. Futures for the S&P 500 Nasdaq-100 also pointed to slight opening gains for the two indexes on Wednesday. The West Texas Intermediate contract for June delivery rebounded in evening trading, popping 13% to above $13.08 a barrel.
Helping sentiment, Senate Republicans and Democrats passed on Tuesday evening a $484 billion coronavirus relief package for small businesses, hospitals and testing. The House could approve the bill as early as Thursday.
On Tuesday, the Dow Jones Industrial Average lost about 630 points, bringing its weekly decline to more than 1,000 points. The 30-stock index was dragged down by Merck & Co., which lost 5.5%, and Boeing, which fell more than 5%.
The S&P 500 also experienced sharp declines, falling more than 3%. The tech heavy Nasdaq Composite fell about 3.5%, its worst daily performance since April 1.
The market’s sell-off this week came beside massive losses in the oil market due to the evaporation of demand. Oil prices are tanking and spreading to more futures contracts, worrying investors about the deep economic damage being done by the coronavirus shutdowns.
“This week investors are realizing that even though the crisis could soon get better, the negative impacts of having an economy which is essentially shut down are magnifying at an alarming rate. With no demand even for a couple months, energy prices go negative as excess oil supplies balloon,” Jim Paulsen, chief investment strategist at the Leuthold Group told CNBC.
The June contract for West Texas Intermediate, which is the more actively traded contract and therefore a better indication of how Wall Street views the price of oil, settled down 43.4% at $11.57 per barrel. On Monday, crude futures for May fell below zero for the first time in history.
Investors also digested another batch of corporate earnings showing the economic fallout of the virus on Tuesday. Shares of IBM fell 3% after reporting a decline in revenue. Coca-Cola fell 2.5% as the beverage company said global volumes plunged 25% due to the coronavirus pandemic.
Netflix and Chipotle both rose in extended trading on Tuesday following their quarterly earnings report. Netflix reported global streaming net additions came in a 15.8 million, far higher than the 8.2 million expected. Netflix, which has rallied nearly 35% this year, is benefiting from the stay-at-home trend. Chipotle saw digital sales surge more than 80% as the revved up online orders during the coronavirus shutdown.
Before the bell on Wednesday, Delta Air Lines, AT&T and Biogen will report earnings.
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The Dow Jones Industrial Average has lost more than 1,000 points this week.