U.S. stock futures suddenly fell after the U.S. Food and Drug Administration announced it would recommend a hiatus in Johnson & Johnson Covid vaccine after reported cases of blood clotting.
Futures linked to the Dow Jones Industrial Average fell 118 points. Meanwhile, those for the S&P 500 were down 0.3%. Nasdaq 100 futures lost 0.3%. J&J shares fell 3% in premarket trading.
“We recommend taking a break from using this vaccine out of caution,” the FDA said in a statement on Twitter.
More than 6.8 million doses of the J&J vaccine have been given in the US and officials are currently reviewing six reported cases of a rare and severe type of blood clot, the FDA said, adding that these cases appear extremely rare.
“Until this process is complete, we recommend taking this break,” said the FDA. “This is important to ensure that the healthcare provider community is aware of the potential of these adverse events and can plan based on the unique treatment that is required for this type of blood clot.”
Stock futures were mostly flat early Tuesday morning leading up to the report as investors await a highly anticipated inflation report to be released before Tuesday’s opening bell on Wall Street.
The futures move ahead of the March consumer price index reading, which is expected to be published at 8:30 a.m.CET. Economists surveyed by Dow Jones forecast an increase in the overall index of 0.5% compared to the previous month and 2.5% compared to the previous year.
Government officials, including Federal Reserve chairman Jerome Powell on Sunday, and Biden administration economists on Monday, stressed that while the change can be expected to spike in inflation in the coming months, it is based on comparisons with last year’s pandemic lockdowns Annual and additional consumer spending could prove to be temporary, stimulus checks and pent-up demand.
Private sector strategists and economists also said the reading may not be a true measure of rising prices.
“We will soon see the effects of the 2020 Covid-19 pandemic on economic data. A particular focus will be inflation. Our message is simple: do not fall victim to this head fake,” Putnam Investments said in a note on Monday.
Fed officials said they were ready to let inflation run hot for a period of time without changing their accommodative policy stance, including buying assets and a benchmark interest rate close to zero.
The markets were calm on Monday with the three main indices pulling back slightly. The S&P 500 finished just a hair short of its previous record closing, while the Dow slipped 55 points. The Nasdaq Composite lagged behind, losing 0.4%.
The bond market was also subdued on Monday, with 10-year government bond yields rising slightly and trading near 1.67%. The returns move inversely to the prices.
The market was calm for the past week as Wall Street plunged into doldrums ahead of the first quarter earnings season. The company news is expected to gain momentum as the week progresses. JPMorgan Chase, Goldman Sachs, and Delta Air Lines are among the companies to release quarterly results.
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