Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., March 2, 2020.
Brendan McDermid | Reuters
Stock futures tumbled in overnight trading Sunday as investors continued to brace for the economic fallout from the spreading coronavirus, while a shocking all-out oil price war added to the anxiety.
Futures on the Dow Jones Industrial Average plunged 1,119 points, pointed to a more than 1,100-point loss at Monday's open. The S&P 500 futures and Nasdaq-100 futures also indicated significant losses at the Monday open. The sharp declines in the futures market signaled more turbulence ahead after a roller-coaster week that saw the S&P 500 swing up or down more than 2.5% for four days straight.
Amid the market turmoil, bond yields trekked toward new record lows. The yield on the benchmark 10-year Treasury note briefly dropped below 0.5%, before recovering slightly to last trade at 0.5241%.
Saudi Arabia on Saturday slashed official crude selling prices for April, in a sudden U-turn from previous attempts to support the oil market as the coronavirus hammers global demand. The move came after OPEC talks collapsed Friday, prompting some strategists to see oil prices crater to $20 this year.
"Crude has become a bigger problem for markets than the coronavirus," Adam Crisafulli, founder of Vital Knowledge, said Sunday. "It will be virtually impossible for the [S&P 500] to sustainably bounce if Brent continues to crater," he added.
International benchmark Brent crude futures plummeted 30% to $32.05 per barrel. U.S. West Texas Intermediate crude dropped 27% to $30.00 per barrel.
Investors have already been on edge about the coronavirus outbreak that caused major stock averages to tumble into correction territory. As of Sunday, global cases of the infections have climbed to more than 109,000 with at least 3,801 deaths around the world. The situation is also worsening in the U.S. with New York, California and Oregon all declaring a state of emergency.
Investors continued to seek safer assets amid fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. The benchmark 10-year Treasury yield tumbled below 0.7% for the first time ever on Friday. Bond prices move inversely with yields.
"The idea that lower gasoline prices is going to put more cash in workers' pockets and give consumer spending and the economy a boost doesn't seem to cushion the blow for stock market investors," Chris Rupkey, MUFG Union Bank's chief financial economist, said in a note Sunday. "They want out. Big time. The sky is falling. Get out, get out while you can. Wall Street's woes have to eventually hit Main Street's economy hard."
Gold, another safe-haven asset, crossed $1,700 an ounce, hitting its highest level since Dec. 2012. Meanwhile, copper prices hit a more than three-year low of $2.46. Copper is seen as a barometer of broad economic demand given its applications in electrical equipment and manufacturing.
The Federal Reserve announced an emergency rate cut last week to combat the economic impact from the virus, its first such move since the financial crisis. President Donald Trump on Friday signed a sweeping spending bill of a $8.3 billion package to aid medical research. Wall Street expects more stimulus from global central banks and governments to prevent a recession.
The S&P 500 has fallen 8% this year after suffering its worst week since the financial crisis at the end of February. The benchmark is down more than 12% from its recent peak.
– CNBC's Pippa Stevens contributed reporting.
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