Stock futures rebound after losing a day as Dow attempts another record-breaking run
Futures on major indexes rebounded on Tuesday a day after worries about slowing economic growth kept investors on their toes and dragged stocks down.
Futures contracts on the Dow Jones Industrial Average gained 154 points, or 0.5%. S&P 500 futures rose 0.3% and Nasdaq 100 futures gained 0.1%. The Dow blue chip climbed 250 points to an all-time high at some point on Monday, but ended the session nearly 100 points lower. It closed around 1% from a record Monday.
The 10-year Treasury yield rebounded on Tuesday, easing some concerns about slowing economic growth, after falling back to near its 5-month lows on Monday.
The spread of the delta coronavirus variant continued to keep investors on the lookout. The seven-day average of daily coronavirus cases in the United States reached 72,790 on Friday, surpassing the peak seen last summer when the country did not have a licensed Covid-19 vaccine, according to data compiled by the Centers for Disease Control and Prevention.
However, on the bright side, the United States has hit the 70% Covid vaccine milestone, according to the CDC.
The stocks that would benefit the most from an economic reopening and more widespread vaccination were won Tuesday in pre-market trade. Stocks of most airlines were higher in pre-market trading, as was Carnival Corp.
“The delta variant of the virus is now spreading rapidly in the United States and a modest decline in activity cannot be ruled out,” said Solita Marcelli, CIO Americas at UBS, in a note. “But any potential slowdown should be mitigated somewhat.”
Traders on the floor of the New York Stock Exchange
Tesla was ready for more gains on Tuesday after rising 3% on Monday.
Simon Property shares rose after trading hours on Monday after the mall owner said sales rebounded to pre-pandemic levels, up 80% from a year ago. It also reports a relatively high occupancy rate.
Concerns about slowing economic growth triggered lower Treasury yields on Monday. The benchmark 10-year Treasury bill yield fell 8 basis points to 1.15%. Monday’s fall in bond yields follows data showing the US manufacturing sector has grown at a slower pace than a month ago.
A late-day sell-off of economically sensitive stocks like Materials and Industrials ultimately pushed the Dow Jones and S&P 500 into the red.
Investors are closely monitoring progress in Washington as lawmakers move towards a bipartisan infrastructure bill that would spend $ 550 billion on U.S. infrastructure. Senate Majority Leader Chuck Schumer aims to rush the 2,702-page legislation through the chamber ahead of a month-long suspension scheduled from August 9.
Meanwhile, the second quarter earnings season continues with Under Armor, Lyft, Eli Lilly and Amgen among the companies to report on Tuesday.
So far, 88% of S&P 500 companies have reported a positive earnings surprise for the second quarter, which will mark the highest percentage since FactSet began tracking this metric in 2008.
“Rising earnings support valuation,” said Terry Sandven, chief equity strategist at US Bank Wealth Management, in a note. “Rising incomes and profits, generally contained inflation, relatively low interest rates, ongoing monetary and fiscal stimulus policies, and medical advances from COVID-19 support our outlook for US stocks to rise in the second half of the year. from 2021. “