Financial safety

Dow futures point to opening drop of 1,300 points, Treasury yields plunge amid oil price war

Stock futures tumbled early Monday morning as investors braced for the economic fallout from the spreading coronavirus, while a shocking all-out oil price war added to the anxiety.

As of 5:10 a.m. ET Monday, futures on the Dow Jones Industrial Average indicated an opening drop of more than 1,300 points. The S&P 500 futures and Nasdaq-100 futures also indicated significant losses at Monday’s open. The sharp declines in the futures market signaled more turbulence ahead after a roller-coaster week that saw the S&P 500 swing up or down more than 2.5% for four days straight.

Amid the market turmoil, investors continued to seek safer assets amid additional fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. The yield on the benchmark 10-year Treasury note dropped below 0.5%, last trading at 0.479%.

Meanwhile, the CME FedWatch tracker indicated traders expect the Federal Reserve to slash interest rates by three-quarters of a percentage point at its upcoming March meeting. Chances for a 75 basis point cut had topped 80% Sunday evening, compared with the 65% chance it had indicated on Friday.