Wall Street to head lower amid new vaccine worries

After relative calm, Wall Street futures are pointing to an opening fall after reports of blood clotting associated with the Johnson & Johnson (NYSE:JNJ) vaccine.

The US Food & Drug Administration has called for a pause in the use of the J&J vaccine.

So the Dow Jones Industrial Average is expected to open 111 points or 0.33% lower while the S&P 500 is set for a 0.27% or 10 point fall and the Nasdaq Composite is likely to dip 0.06%.

Before the vaccine news, analysts had been anticipating the latest US inflation figures and the US markets were expected to open higher.

Sophie Griffiths, market analyst at Oanda, said: “US futures are pointing to a muted but mildly positive open as investors focus on the CPI release due. Inflation expectations have become a key driver for the markets over recent months as optimism surrounding a strong US economic recovery grows. While the Fed has stuck unwaveringly to its dovish hymn sheet, insisting any rise in inflation is expected to be short term, markets are still focusing firmly on when any monetary policy tightening could begin…

“Expectations are for an increase of 0.5% month-on-month and 2.5% on an annual basis, up from 1.7% in February. A strong-than-forecast number could lift [US Treasury] yields, boosting the US dollar.”

Chris Beauchamp at IG said: “[Federal Reserve chair Jerome] Powell and co have done a good job of keeping expectations in check recently regarding inflation and rate rises, but a stronger CPI figure might well render these efforts worthless. The market appears determined to hunt down any sign that inflation is taking hold in a more permanent fashion, and after the PPI surprise last week investors are not going to let themselves be taken by surprise.”

Four things to watch for on Tuesday:

• The earnings diary will see results from industrial and construction supply firm Fastenal Co (NASDAQ:FAST) and video software group SeaChange International Inc (NASDAQ:SEAC)
• Meanwhile, American Airlines Group Inc (NASDAQ:AAL) will also be in focus after its first quarter losses were worse than markets had expected
• Bitcoin is also grabbing the headlines once again after it broker fresh records, reaching an all-time high of around US$62,923 in earlier trading
• In the macro diary, US inflation data will be the key announcement, while there may also be interest in speeches from various Fed representatives

Story by ProactiveInvestors