Wall Street ticked into the red this morning as energy and travel stocks slipped, while investors awaited remarks from Federal Reserve chair Jerome Powell on the health of the US economy.
Powell will join US Treasury secretary Janet Yellen to provide testimony to US politicians in Congress later today. He is expected to say that the American economy has recovered slightly alongside the vaccine rollout, but that a return to health is far from complete.
The tech-heavy Nasdaq shed some of yesterday’s gains ahead of the Congress hearing, opening 0.2 per cent lower on Tuesday, while the S&P 500 and Dow Jones dipped 0.1 per cent each.
Hotel chain Marriott, and cruise operators Carnival and Norwegian all slipped around 2.5 per cent as global vaccination uncertainties narrowed the prospects of foreign travel this summer.
Netflix led the S&P 500 this morning, rising 2.9 per cent on renewed lockdowns around the world, including countries such as France, Italy and Germany.
Computing giant Microsoft was also in the green, rising 0.9 per cent amid rumours that it may put forward a billion dollar bid for video gamer chat platform Discord.
Meanwhile in London, the FTSE 100 remained in the red this afternoon as tough new travel curbs rattled stocks on the anniversary of the first Covid lockdown.
London’s blue-chip index was trading 0.2 per cent lower at 6,714 points shortly 2pm. The more domestically-focused FTSE 250 also slipped 0.4 per cent.
It comes after new laws were unveiled that will hand a £5,000 fine to anyone in England trying to travel abroad without good reason.
This took its toll on travel stocks, with Intercontinental Hotels Group, British Airways owner IAG, Easyjet and Ryanair all tumbling between two and six per cent.
Oil prices also plunged today, falling three per cent as new coronavirus lockdowns and tougher travel restrictions across Europe raised fears of a slump in demand.
Oil majors BP and Shell, as well as banks including HSBC, Barclays and Lloyds also slipped as investors were spooked by a fresh wave of lockdowns and slow vaccine rollouts in Europe.
“The morning certainly had a whiff of 2020 about it, and though the European markets didn’t collapse after the bell, it was hard to shake the negativity that comes from being stuck in a loop of the same headlines for months on end,” said Connor Campbell at Spreadex.
New figures this morning also showed a surprise fall in unemployment, which dropped from 5.1 per cent to five per cent in January.
However, this remained above the same time last year, while analysts warned the furlough scheme is still propping up the labour market.