Stock futures crashed during overnight sessions Wednesday as investors assessed the tempo of economic rebound and new developments surrounding the global health crisis.
Futures dipped about 280 points on the Dow Jones Industrial Average, and the S&P 500 and Nasdaq 100 Futures were down 0.5 percent and 0.3 percent, respectively.
The shift in the futures came in the wake of two consecutive days of retreats for the 30-stock Dow and S&P 500 as investors ditched the mega-cap tech names to reopen trades.
The Nasdaq Composite, on the other hand, was up 0.7 percent to hit a record closing high of 10,020.35, as well as its first ever close above the 10,000 level.
In a very volatile session, the S&P 500 closed lower as Fed Chairman Jerome Powell stated that the global pandemic could cause longer lasting harm to the overall economy, even as the central bank signaled that interest rates would stay close to zero for many years to come.
The Federal Reserve also said it would keep the current rate of bond purchases at least. Treasury 10-year yields were down to as low as 0.72 percent, while the US currency stretched its June retreat to 2.5 percent.
The Fed kept interest rates unchanged and close to zero as it expected a sluggish economic recovery from the recession triggered by the pandemic.
Bank officials suggested in their first economic forecasts this year that they anticipated the unemployment rate to hit 9.3 percent by the end of the year.
The US jobless remain is seen to remain elevated for years, coming in at 5.5 percent by 2022. At the end of this year, output is expected to be 6.5 per cent lower compared to final three months of last year. Policymakers expect the key rate to stay the same through 2022 at least, according to the Fed's projections.
Concerns over a second wave of cases of coronavirus have risen as US states move further into reopening. Texas recorded three consecutive days of COVID-19 hospitalizations. Nine counties in California has also registered an increase in new cases of the disease or confirmed-case hospitalizations, AP reported Wednesday.
Analysts surveyed by Dow Jones anticipate filings for jobless claims to reach 1.595 million last week which is down from 1.774 million compared to the week earlier.
Meanwhile, the OECD cautioned earlier that the global economy would narrow by around 6 percent this year, with record losses in income and huge uncertainty as a result of measures to combat the pandemic.