COVID-19 angst is back on Wall Street, with the U.S. indices posting significant corrections. Through the first half of the trading day, the DJIA DOW (-608), S&P 500 SPX (-70), and NASDAQ (-191) are all deep into the red. A resurgence in coronavirus cases has sent risk assets to the bear for the time being.

Last night, Arizona, Texas, and California reported daily records of new COVID-19 infections. The briefs have brought negative sentiment to risk assets as 27 U.S. states are showing increases in infections. At this hour, questions are being raised regarding the reinstitution of quarantines and travel restrictions. With the July 4th holiday rapidly approaching, health officials are debating whether or not we are entering the dreaded “second wave.”

On the U.S. economic news front, there isn’t a whole lot scheduled for today. The pre-market headliners included a slight 0.1% uptick in the Housing Price Index (MoM, April) and a plunge in MBA Mortgage Applications for June 19 (-8.7%). Both events are of limited importance, but the dramatic drop in applications signals that home buyers are exercising caution going into the summer.

For now, the markets are closely watching the recent growth in COVID-19 cases. Subsequently, the theme of today’s action has been “risk-off.”

COVID-19 Spike Sends Stocks South

The past 24-hours have been tumultuous for the September E-mini NASDAQ. Prices have retreated from all-time highs to the 10,000 psyche barrier.

Here are the key levels to watch in this market for the near future:

• Resistance(1): Spike High, 10,296.25
• Support(1): 38% Retracement of June’s Range, 9941.25

Overview: Today’s selloff in the U.S. indices is a bit of a surprise. It’s no secret that COVID-19 cases are likely to grow as the economy reopens and testing facilities expand. However, to see the markets post a steep correction some 90+ days into the contagion is peculiar.

Another reason for the tumult may be that traders are getting a jump on tomorrow’s Q1 U.S. Annualized GDP and weekly jobless claims numbers. These figures are likely to paint a dismal economic picture ― perhaps investors are limiting risk in case Thursday’s news is worse than expected.