US Futures Point to Even More Losses at the Open, Dow Implied to Drop Almost 200 Points

On Tuesday evening stateside, Dow Jones Industrial Average futures were reasonably volatile, but, as of 11:47 p.m. ET, implied an opening decline of 193.20 points. S&P 500 and Nasdaq futures also pointed to negative moves for when the indexes open on Wednesday.

American exchanges were closed on Tuesday for the Christmas holiday, but stocks are inheriting downside momentum from a Monday plunge when they recorded their worst Christmas Eve trading ever — and the S&P 500 entered a bear market.

The Dow Jones Industrial Average dropped by 653 points Monday in volatile trading, falling below 22,000. The Dow sank more than 2 percent, then recovered nearly all of the day’s losses, before again falling more than 2 percent. The S&P 500 fell 2.7 percent, slipping into a bear market as it fell 20.06 percent from recent highs. Wall Street traditionally considers a drop of 20 percent or more from recent highs to be a bear market. The Nasdaq Composite Index slid 2.2 percent.

The plunge in stocks on Monday stateside came after U.S. Treasury Secretary Steven Mnuchin held calls with CEOs of major U.S. banks last weekend and issued a statement saying, “The banks all confirmed ample liquidity is available for lending to consumer and business markets.”

On Monday, a senior Treasury official, who declined to be named, told CNBC that the purpose of the call and putting out the statement, was a “prudent, preemptive measure” following last week’s market volatility, which saw the Dow experiencing its worst one-week plunge in a decade. Yet while the moves were intended to be reassuring, they triggered confusion among market watchers.

“This call was absolutely unnecessary and in terms of their ability to communicate to the markets, they’re losing it,” Frank Troise, managing director at SoHo Capital, told CNBC’s “Squawk Box” on Wednesday.

Troise said the Treasury call begs the question of whether Mnuchin has “no idea what he’s doing” or if “there actually is a liquidity crisis.” If the latter option is the case, he questioned why it didn’t come up in the Federal Reserve’s recent minutes.

“The concern now in the market is actually that Treasury’s out of touch with what’s going on,” he said.