S&P 500 Futures drop 1.0%, US treasury yields decline amid risk-off

• Signals of further challenges, due to coronavirus, recently weigh on the market’s risk sentiment.
• US stock futures follow the footsteps of Wall Street, Treasury yields remain on the back foot below 0.70%.

While the increase in the coronavirus numbers from the US and Europe earlier weighed on the market’s risk sentiment, expectations of a double-digit contraction in the US economy and millions to get infected recently heavies the market’s risk catalysts off-late.

US President Donald Trump recently cited the fears while saying that the upcoming two weeks will be very tough. "White House officials are projecting between 100,000 and 240,000 deaths in the U.S. with coronavirus fatalities peaking over the next two weeks," said CNBC.

Also contributing to the market’s risk-off could be the latest figures of New York City (NYC) deaths due to the virus. As per the update, there are more than 1,000 deaths by the end of Tuesday in NYC due to the deadly disease.

That said, futures linked to S&P 500 and Dow Jones mark nearly 1.0% losses by the press time whereas the US 10-year treasury yields decline three basis points to 0.67% as we write. Further to portray the risk-off, Japan’s NIKKEI drops 1.90% to 18,540 as Tokyo opens for trading on Wednesday.

Given the recent fears of the virus outbreak in the West, investors will keep eyes on any updates for near-term direction. In doing so, safe-havens like Gold, Japanese yen and the US dollar might be of their choice.