U.S. stock-index futures drifted lower on Tuesday but were hanging not far from break-even levels as investors awaited the first presidential debate, a number of important economic reports and a barrage of speakers from the Federal Reserve.
How are stock indexes performing?
Futures for the Dow Jones Industrial Average YM00, -0.07% YMZ20, -0.07% were little changed at 27,486, up a mere 4 points, or less than 0.1%; while those for the S&P 500 index ES00, -0.11% ESZ20, -0.11% were less a point higher at 3,346.75, and Nasdaq-100 futures NQ00, -0.36% NQZ20, -0.36% gave up 11.25 points, or 0.1%, at 11,383.50.
On Monday, the S&P 500 SPX, +1.61% rose 53.14 points, or 1.6%, to end at 3,351.60. The Nasdaq Composite COMP, +1.86% climbed 203.96 points, or 1.9%, to close at 11,117.53. The Dow Jones Industrial Average DJIA, +1.50% advanced 410.10 points, or 1.5%, finishing at 27,584.06, while booking its third session of gains in a row.
The Russell 2000 index RUT of small-capitalization companies outperformed, booking a 2.4% gain to close at 1,510.35.
What’s driving the market?
After a solid start to kick off the past week of trading in September, major equity-index futures were drifting slightly lower, with the global tally of infections from the novel strain of coronavirus that began to spread across the world last December surpassing a tragic milestone of one million.
The handling of the outbreak and plans for the U.S.’s economic recovery are likely to be some of the topics featured at the presidential debate between Republican Donald Trump and Democratic challenger, former Vice President Joe Biden in Cleveland. The U.S. has the highest case tally at 7.1 million, and highest death toll at 205,085.
Investors will be keying in on further guidance on new policy measures from Trump and more signs that Biden is prepared to take the reins as commander-in-chief should he prevail in the November contest.
Overall, the debate which starts at 9 p.m. Eastern Time could help to set the tone for markets for the next 35 days until the Nov. 3 presidential election.
Monday’s action marked two days of gains of greater than 1% for the three benchmarks and investors appeared set to digest some of those moves as the political race heats up, experts said.
Peter Cardillo, chief market economist at Spartan Capital Securities, said that “after two days of a back-to -back rallies investors are not likely to over extend the climb, as this evening political event enhances a steady to mixed market session,” referring the debates.
Meanwhile, House Democrats released a $2.2 trillion bill for a coronavirus-relief package late Monday but the prospects of getting additional funding appear to be dimming as the focus on Washington shifts to the fight over Trump’s Supreme Court nominee Amy Coney Barrett, which was named by the president over the weekend to fill the vacancy left by the death of judicial luminary Ruth Bader Ginsburg.
Still, reports indicate that Pelosi will discuss the new aid proposal with Treasury Secretary Steven Mnuchin early Tuesday in a last-ditch effort to revive those drawn-out negotiations. Additional support from the government for businesses and the unemployed due to the COVID-19 pandemic has been viewed as central to helping support the next phase of the economic recovery from the pandemic. However, new legislation from Democrats has been met with resistance from Republican Senators opposed to a large new round of deficit spending.
In economic reports, investors are waiting for a reading of advance trade in goods, wholesale and retail, for August due at 8:30 a.m. A housing report from Case-Shiller, the national home price index, for July is due at 9 a.m., while a reading of consumer confidence is set to be released at 10 a.m.
The day will be marked by stream of Fed speakers, including Philadelphia Fed President Patrick Harker at 9 a.m., who will speak at the central bank’s Official Monetary and Financial Institutions Forum. New York Fed President John Williams will be featured in a “fireside chat’ sponsored by the Fischer Center for real estate and urban economics at 1 p.m., while Fed Vice Chair Randal Quarles will discuss financial stability with Harvard Law School also at 1 p.m. and he will speak with the University of Maryland at 3 p.m.
Which stocks are in focus?
- Shares of discount retailer Big Lots Inc. BIG, +2.64% jumped in premarket trade Tuesday, after the company said it expects a big jump in third-quarter same-store sales and guided for per-share earnings that are well above the consensus.
- McCormick & Co. Inc. MKC, +1.88% posted better-than-expected earnings for its fiscal third quarter, resumed guidance and announced a 2-for-1 stock split, saying it is still benefiting from dining at home during the pandemic
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