Stocks tumble as new COVID strain overshadows stimulus deal

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US stocks were poised to plunge Monday as fears about a new coronavirus strain emerging in the UK outweighed hopes about Congress passing a new stimulus bill.

Futures contracts tied to the Dow Jones industrial average tumbled 468 points, or 1.5 percent, to 29,645 as of 6:57 a.m. after British officials imposed a strict lockdown on London and other nearby areas over the weekend to stem the spread of the highly contagious strain.

S&P 500 futures likewise sank 1.7 percent while futures for the tech-heavy Nasdaq 100 dropped about 1.1 percent as of 6:58 a.m.

The new COVID-19 strain spooked Wall Street despite congressional leaders announcing a roughly $900 billion coronavirus relief package on Sunday.

Investors have been anticipating more stimulus spending for weeks as health officials rolled out the first coronavirus vaccines that could help bring an end to the pandemic — but the UK lockdown suggested there may be bumps in the road to recovery.

“Markets have adopted a light at the end of the tunnel approach since Pfizer and Moderna’s vaccines burst onto the stage,” said Jeffrey Halley, senior market analyst at OANDA. “However, the weekend’s events have delivered an unceremonious Monday morning wake-up call that negotiating [the first quarter] of 2021 could be a torturous affair.”

Meanwhile, the CBOE Volatility Index — known as Wall Street’s fear gauge — surged about 32 percent to 28.95 as of 6:55 a.m., reaching its highest level since early November.

Wall Street was set to follow European markets lower at the opening bell. London’s FTSE 100 was recently down about 2.3 percent, while Paris’ CAC 40 and Germany’s DAX were off 2.8 and 3.1 percent, respectively.

Oil prices also fell amid the lockdown fears. West Texas Intermediate crude oil futures were down 3.8 percent at $47.23 a barrel as of 7:01 a.m. and Brent crude futures were recently off about 3.7 percent at $50.31 a barrel.

With Post wires

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