U.S. stock futures rebounded Friday, a day after the worst market drop since March which came on fears a resurgence in coronavirus cases.
Dow Jones Industrial Average futures rose 400 points, or 1.6% on Friday. The move implied an opening gain of about 440 points. S&P 500 futures gained 1.4%. Nasdaq-100 futures added 1.1%.
Investors on Friday went right back into the plays whose fates hinge on a successful reopening of the economy. Carnival Corp jumped 10.6% in premarket trading. United Airlines climbed 10.5%. Other premarket winners included brick-and-mortar retailers Kohl’s and Gap. Those stocks were hit big time during Thursday’s sell-off as investors feared the reopening of the economy could be delayed by a second wave of cases.
The Dow, S&P 500 and Nasdaq on Thursday all recorded their biggest one-day losses since mid-March, posting losses of at least 5%. Thursday’s declines put the major averages on pace for their biggest weekly losses since March 20, when they all dropped at least 12% amid broad economic shutdowns stemming from the pandemic.
Even after Friday morning’s bounce, Morgan Stanley Investment Management’s Andrew Slimmon said: “Given the magnitude of the rally, it would shock me if we had a one day sell-off and that’s it.”
“The stocks that are up the most from the lows are still the risk-on, high beta, value, small-cap stocks,” Slimmon, who is a managing director and senior portfolio manager at the firm, told CNBC’s “Squawk Box Asia” Friday morning Singapore time. “They’re still the big winners and I would suspect that there’s more pain to come near-term before the market clears out kind of this excessive speculation that we’ve seen recently.”
Wall Street’s fear gauge signaled more wild trading ahead. The Cboe Volatility Index on Thursday jumped to trade above 40 for the first time since May 4. The VIX remained elevated Thursday morning, above 37.