Market: US futures point to a lower open due to travel ban

The futures are pointing to a lower open on Thursday as the spread of the COVID-19 or coronavirus enabled the government to ban travel from most of the European countries to the US. The virus spread has infected over 1,100 Americans and killed 38. The fears of the investors have intensified about the economic fallout from the virus.

The experts predict that the brutal sell-off in the futures could signal a so-called circuit breaker when the market opens on Thursday. This means if the S&P 500 drops 7%, the market trading will be halted for 15 minutes. On Monday, trading was temporarily halted after the huge sell-off at the market open.

The S&P futures dropped 5.08% to 2,601, Dow futures fell 5.22% to 22,344 and Nasdaq inched down 5.02% to 7,601.50. Elsewhere, shares at Asian markets closed lower on Thursday and the European stocks were at their lowest in almost four years.

On March 11, US ended lower, with Dow down 5.9% to 23,553.22, the Nasdaq inched down 4.7% to 7,952.05 and the S&P 500 dropped 4.9% to 2,741.38. The market remained concerned about the economic impact after the World Health Organization declared the coronavirus outbreak a global pandemic.

On Wednesday evening, President Donald Trump said from the Oval office that all travel from Europe to the United States will be suspended for the next 30 days, starting from Friday midnight. The travel restrictions do not apply to trade and cargo from Europe. Also, the government will be monitoring the situation in China and South Korea.

Read: Is the US economy heading into a recession?

The president has instructed the Small Business Administration to provide capital and liquidity to firms affected by the virus. Trump asked Congress to increase funding for those firms by an additional $50 billion and will instruct the Treasury Department to defer tax payments for certain individuals and businesses. This action is expected to provide more than $200 billion of additional liquidity to the economy.

Meanwhile, key economic data that will be released today include the weekly jobless claims, the producer price index for the month of February and the financial accounts of the US for the fourth quarter.

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