By Noreen Burke
Investing.com - U.S. stock futures pointed to steep falls at the open on Thursday, a day after a massive rally as fears over the global economic impact of the coronavirus outbreak stoked major market volatility.
By around 07:30 AM ET (1230 GMT) Dow futures were down 425 points, or around 1.6%. S&P 500 futures and Nasdaq 100 futures were both down around 1.7%.
The losses in premarket trade came a day after the Dow and the S&P 500 surged more than 4% as former Vice President Joe Biden's strong showing in the Super Tuesday Democratic primary contests powered a jump in healthcare stocks, and upbeat economic data soothed worries about the impact of the spreading coronavirus outbreak.
Stocks had also been boosted after the U.S. House of Representatives approved an $8.3 billion funding bill to combat the spread of the coronavirus. The emergency legislation followed a surprise rate cut by the U.S. Federal Reserve on Tuesday.
But markets resumed their selloff on Thursday as cases of the coronavirus surged in the U.S., leading California to declare a state-wide emergency.
The coronavirus epidemic showed no signs of slowing, with deaths mounting globally.
"There is little doubt that the COVID-19 outbreak will slow global growth considerably this quarter, and we expect it to actually produce a rare non-recessionary contraction in GDP," said JPMorgan economist Joseph Lupton.
A steady stream of corporate warnings about the impact of the outbreak reminded markets of the limitations of policy measures such as interest rate cuts.
Shares in Southwest Airlines (NYSE:LUV) were down around 3% in premarket trade after the budget carrier warned its first-quarter operating revenue would take a hit of up to $300 million from the virus, prompting it to cut its quarterly revenue outlook.
--Reuters contributed to this report