New COVID-19 infections jumped 70% last week to about 30,000 a day as the Delta variant continued to spread. Deaths rose to an average of 250 a day, mostly in unvaccinated people.
Dow Jones Industrial Average futures fell 440 points, or 1.27%, while S&P 500 futures and Nasdaq 100 futures declined 1.09% and 0.9%, respectively. The major averages on Friday suffered their biggest single-day declines in a month.
Selling in the equity markets caused investors to seek safety in the U.S. Treasury market with the yield on the 10-year note falling to 6 basis points to 1.23%, the lowest since mid-February.
In stocks, rate-sensitive banks, like JPMorgan Chase & Co. Bank of America Corp. and Citigroup Inc., were lower.
Travel stocks, including Delta Air Lines Inc., Carnival Corp. and Las Vegas Sands Corp., were weaker for a second day amid concerns a COVID-19 resurgence could cause virus-wary travelers to stay home.
Meanwhile, energy companies were in the crosshairs as West Texas Intermediate crude oil tumbled $2.26 to $69.55 a barrel after OPEC and its allies agreed to raise production by an additional 2 million barrels per day beginning in August.
In deals, Zoom Video Communications Inc. agreed to buy cloud-based call center operator Five9 Inc. for $14.7 billion in stock. The deal, which was done at a 13% premium to Five9’s closing price on Friday, will pay Five9 shareholders 0.5533 Zoom shares for each Five9 share they own.
Elsewhere, Johnson & Johnson is considering a plan that would put its Baby Powder and other talc-related operations into a new business that would then file for bankruptcy, Reuters reports, citing seven people familiar with the matter. Such a move could result in lower payouts for lawsuits not settled before a bankruptcy filing.
Overseas markets were sharply lower.
France’s CAC 40 and Germany’s DAX 30 paced the decline in Europe, both losing 2.01%, while Britain’s FTSE 100 fell 1.86%.
In Asia, Hong Kong’s Hang Seng index slid 1.84%, Japan’s Nikkei 225 tumbled 1.25% and China’s Shanghai Composite was little changed.