Wall Street tumbles as virus concerns mount, Europe eyes new lockdowns
Stocks dropped sharply, pointing to another volatile day on Wall Street as investors nervously eyed elevated coronavirus case counts in the U.S. and Europe, weighed outcomes of Election Day next week and contemplated when another round of fiscal stimulus out of Washington might get passed.
The drop in domestic equities came alongside a plunge in European stocks, with the STOXX 600 selling off and hitting the lowest level since May.
- Concerns of even more restrictions across the region weighed on global risk assets, with French President Emmanuel Macron set to give a speech later today in France that could be used to announce more lockdowns. And German Chancellor Angela Merkel is considering closing all bars and restaurants in the country for one month starting in early November, according to a draft proposal obtained by Reuters.
In the U.S., hospitalizations related to COVID-19 have risen by at least 10% over the past week across 32 U.S. states and Washington, D.C., according to data compiled by Bloomberg.
- The CBOE Volatility Index (^VIX) jumped more than 18% to its highest level since June. Contracts on the Dow tumbled more than 700 points mid-morning. Component Microsoft dropped even after the tech giant reported quarterly revenue that grew a better-than-expected 12% as its Azure cloud offering accelerated sales growth from the previous period. Guidance for some business units’ current-quarter performance came in light, however.
Tech stocks will remain in focus on Wednesday. The U.S. Senate Committee on Commerce, Science and Transportation began holding a hearing with Twitter (TWTR) CEO Jack Dorsey, Facebook (FB) CEO Mark Zuckerberg and Alphabet (GOOG, GOOGL) CEO Sundar Pichai to discuss Section 230 of the Communications Decency Act, which has to date helped protect online platforms from liability over user-created content.
- The three tech executives offered a vocal defense of these legal protections in prepared remarks, with Dorsey calling Section 230 “the Internet’s most important law for free speech and safety.” Zuckerberg maintained that Section 230 “encourages free expression” and “allows platforms to moderate content,” according to a copy of his opening statement. However, Zuckerberg also noted he was open to Congress updating “the law to make sure it’s working as intended.”