Futures point to a sharply lower open
U.S. stocks were set to start the week sharply lower as a rise in the number of global coronavirus cases and the death of Supreme Court Justice Ruth Bader Ginsburg injected fresh uncertainty.
Coronavirus cases continue to surge, with twelve U.S. states reporting at least 1,000 new cases on Saturday, led by California and Texas.
Brazil recorded more than 16,000 new cases in the past 24 hours, while India reported nearly 87,000 and France over 10,000. The United Kingdom registered a further 3,899 cases.
Meanwhile, the death of Justice Ruth Bader Ginsburg on Friday set the stage for a fierce political battle over whether President Donald Trump and Senate Majority Leader Mitch McConnell can replace her with a conservative jurist ahead of the November presidential election.
As of 5:40 a.m. ET, futures tied to the blue-chip Dow indicated a loss of 561 points, or 2.03% to 27,041. The S&P 500 futures shed 59.63 points, or 1.8% to 3,256.62 while the tech-heavy Nasdaq 100 futures dropped 187.75 points, or 1.72% to 10,739.25.
Nikola sinks as founder voluntarily steps down in the wake of SEC probe
Shares of Nikola (NASDAQ: NKLA) plunged early Monday after founder Trevor Milton announced his resignation as executive chairman following fraud allegations by a short seller and potential investigation by the U.S. Securities Exchange Commission (SEC).
“The focus should be on the Company and its world-changing mission, not me. So I made the difficult decision to approach the Board and volunteer to step aside as Executive Chairman,” Milton said in a statement.
Nikola has named Stephen Girsky, a former vice chairman of General Motors Co and a member of its board as the chairman, effective immediately.
Short seller Hindenburg Research published a report earlier this month accusing Milton and the electric-truck maker of misleading investors over its technology and overstating the value of a business deal. Nikola denied the accusation, saying there were dozens of inaccurate allegations in the report.
As of writing, Nikola stock was down $11.29, or 33.02% to $22.90 a share in the pre-market trading session.
TikTok temporarily avoids U.S. ban
President Donald Trump has approved a deal that would see Oracle (NYSE: ORCL) and Walmart (NYSE: WMT) become minority shareholders in TikTok’s U.S. operations.
Trump was expected to ban the popular short-video app on Sunday but a last minute deal between Oracle and Walmart kept it afloat.
“I have given the deal my blessing,” the president said at a news briefing at the White House on Saturday. “I approve the deal in concept.”
The deal will see Oracle and Walmart create a joint company called TikTok Global. The new company would be headquartered in the U.S. and take over storage and processing for all U.S.-based TikTok subscribers.