By Sruthi Shankar

(Reuters) – U.S. stock index futures lurched downwards on Friday as a spike in new coronavirus cases in China and elsewhere sent investors scrambling for safer assets such as gold and government bonds.

The risk-off mood was exacerbated by data showing Japan’s factory activity suffered its steepest contraction in seven years in February, underlining the risk of a recession in the world’s third-largest economy as the outbreak takes a toll on global growth.

With massive disruptions in supplies from China, parts shortages are hitting businesses as far away as the United States.

U.S. stocks fell about 1% at one point on Thursday, with high-growth stocks including Microsoft Corp (O:) and Apple Inc (O:) taking the biggest hit.

Beijing reported an uptick in cases of coronavirus on Friday and South Korea reported 100 new cases that doubled its infections, while more than 80 people have tested positive for the virus in Japan.

Although daily updates on the spread of the virus have kept investors on edge, hopes that central banks across the globe will take measures to counter any slowdown have cushioned global stocks and kept the benchmark S&P 500 () near all-time highs.

At 7:15 a.m. ET, were down 100 points, or 0.34%. S&P 500 e-minis were down 12.75 points, or 0.38% and were down 44.5 points, or 0.46%.

Investors will keep an eye on IHS Markit’s U.S. manufacturing and services sector activity data for February, due at 9:45 a.m. ET, to gauge the impact of coronavirus on businesses.

A host of Federal Reserve officials including Dallas Fed’s Robert Kaplan and Cleveland Fed President Loretta Mester – both voting members of interest-rate setting committee this year – are set to speak later in the day.

Traders are looking for signs on whether the Fed will cut rates this year amid fears of the coronavirus outbreak denting global growth. However, recent data has suggested U.S. economy is showing no signs of losing steam.

Among stocks, Dropbox Inc (O:) jumped 11.9% in premarket trading after it raised its outlook for operating margin and announced a $600 million share buyback, while Deere & Co (N:) rose 8.2% after an unexpected rise in first-quarter profit.

Sprint Corp (N:) climbed 5.5% as it announced new merger terms with T-Mobile US (O:) that would reduce the stake of major Sprint shareholder SoftBank. T-Mobile shares dipped 1%.

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