Futures drop as data set to show historic second-quarter slump

(Reuters) – U.S. stock index futures fell on Thursday with investors staying cautious ahead of data that is likely to confirm the COVID-19 pandemic caused the steepest pace of economic contraction since the Great Depression in the second quarter.

Gross domestic product probably collapsed at a 34.1% annualized rate last quarter, according to a Reuters survey of economists, as business activity came to an abrupt halt to slow the spread of the virus outbreak.

While signs of a pickup in activity fueled a stellar rally in U.S. stocks, the momentum of economic recovery appears to have slowed recently amid a resurgence in new infections, especially in southern and western U.S. states, leading to a pause in reopening plans.

The S&P 500 is about 4% below its Feb. 19 record high after coming within 3% of that level last week.

The Commerce Department’s report is expected at 8:30 a.m. ET (1230 GMT). Separately, the Labor Department’s data is expected to show an uptick in jobless claims in the latest week.

U.S. Federal Reserve on Wednesday acknowledged the surge in COVID-19 cases is likely stalling economic recovery. The central bank also pledged to support the economy as long as necessary, lifting Wall Street’s three main indexes at the end of the session.

Also dampening the mood was a deadlock in negotiations in the U.S. Congress over a pandemic relief plan, before a $600-per-week unemployment benefit lapses on Friday.

Thursday also marks the first time the four of the biggest U.S. tech companies — Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Alphabet Inc (GOOGL.O) and Facebook Inc (FB.O) — will post financial results on the same day, with expectations running high as their valuations soared over the past three months.

Shares of the companies, which have a combined market value of about $5 trillion, fell between 0.6% and 0.9% premarket. On Wednesday, the CEOs of the four companies took jabs from lawmakers for antitrust issues.

At 6:16 a.m. ET, Dow e-minis 1YMcv1 were down 221 points, or 0.84%, S&P 500 e-minis EScv1 were down 28.75 points, or 0.88% and Nasdaq 100 e-minis NQcv1 were down 104 points, or 0.97%.

Qualcomm Inc (QCOM.O) jumped 11.5% after forecasting fourth-quarter revenue largely above expectations, powered by sales of its chips used in 5G devices and reaching a settlement with Huawei Technologies Co Ltd.

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