U.S. stock-index futures rallied Tuesday morning, aiming to add to the previous day’s comeback amid reports that President Donald Trump is backing fresh stimulus measures to help the coronavirus-stricken economy recover.
Investors also are awaiting testimony from Federal Reserve Jerome Powell, which could provide additional insights about the policy maker’s economic outlook after the central bank’s policy decision last Wednesday.
How are benchmarks faring?
Futures for the Dow Jones Industrial Average YM00, +1.68% YMM20, +1.65% were rising 429 points, or 1.7%, at 26,104, those for the S&P 500 index ES00, +1.14% ESM20, +1.14% were 34.10 at 3,096.25, a gain of 1.1%, while Nasdaq-100 futures NQ00, +1.03% NQM20, +1.01% were advancing 104.50 points, or 1.1%, at 9,893.
On Monday, the Dow DJIA, +0.61% closed 157.62 points higher, or 0.6%, at 25,763.16, after falling by as many as 762 points or 3% at its Monday low, The S&P 500 SPX, +0.83% added 25.28 points, or 0.8%, finishing at 3,066.59, after hitting an intraday low at 2,965.66, or down 2.5%. The Nasdaq Composite Index COMP, +1.43% advanced 137.21 points. or 1.4%, ending at 9,726.02.
Both the S&P 500 and the Dow mounted their sharpest reversal to finish in positive territory since March 19, according to Dow Jones Market Data.
What’s driving the market?
After a tumultuous session to start the week that ended higher, investors appear to be regaining their appetite for risk, with worries of a resurgence of the COVID-19 pandemic falling aside.
On Tuesday, the market’s early advance was being attributed to reports that the Trump administration was attempting to push through some $1 trillion of stimulus through the economy on the back of an existing infrastructure funding that comes up for renewal on Sept. 30, Bloomberg News reported.
Meanwhile, markets participants will be watching remarks from Federal Reserve Chairman Jerome Powell as he testifies in front of the Senate as a part of his two-day semiannual testimony before the U.S. Congress. Powell’s Senate testimony starts at 10 a.m. Eastern and he will speak to the House the following day.
Read: MarketWatch’s Need to Know column: A budding recovery could run into trouble after the election, warns Goldman Sachs
Investors will be eager to see if the central-bank boss has more to say about the economic outlook after his views after Wednesday’s policy update last week were perceived as negative, driving equities sharply lower. Powell has advocated for additional stimulus measures by the government rather the Fed to help the economy recovery, a point he is likely to reiterate on Tuesday as talk of a infrastructure package resurfaces.
On Monday, markets shrugged off evidence of rising infections of the novel strain of coronavirus and added to gains in afternoon trade after the Fed said it was expanding the scope of its $750 billion emergency corporate debt loan facility to include individual corporate bonds.
One key piece of economic data on Tuesday will be a reading of retail sales. Retail sales data for May, which will be released at 8:30 a.m., which could provide further guideposts for investors and strategists about the economic recovery and the health of consumers as businesses enter various phases of reopening.
Looking beyond that, investors also will digest a reading of industrial production for May at 9:15 a. m., reports on business inventories and housing market index are due to be released at 10 a.m. In addition to Powell, the Fed’s No. 2 to Chairman Richard Clarida will speak at 6 p.m.
Which stocks are in focus?
- European Union antitrust authorities launched two probes into whether Apple Inc. AAPL, +1.23% violated competition laws through its Apple Pay service and its App Store for software that runs on its mobile devices.
- Shares of iQIYI Inc. IQ, +7.58% rocketed in very active trading Tuesday, after Reuters reported that Tencent Holdings Ltd. TCEHY, +0.14% was looking to become the largest shareholder in the China-based provider of video streaming services.
- Caesars Entertainment Corp. CZR, +1.21% disclosed Tuesday that revenue for the reopened regional properties, for the period they were operating in May and/or June through June 10 were flat to up 2% from a year ago.
- WW International Inc. shares WW, +2.09% surged in the extended session Monday after the Weight Watchers parent company said digital subscriptions boosted numbers from a year ago because of the COVID-19 pandemic.
How are other assets faring?
West Texas Intermediate U.S. crude CLN20, +1.53% tacked on 57 cents, or 1.6%, to trade at $37.70 a barrel on the New York Mercantile Exchange, after recovering on Monday to settle higher.
The greenback traded down 0.6%, as gauged by the ICE U.S. Dollar index DXY, -0.04%.
Check out: ‘The dollar is going to fall very, very sharply,’ warns prominent Yale economist
In precious metals, August gold GCM20, +0.34% on Comex traded $6.40, or 0.4%, higher at $1,733.60 an ounce
The 10-year Treasury note yield TMUBMUSD10Y, 0.743% rose 3.5 basis points to 0.74%. Bond prices move in the opposite direction of yields.
In global equities, the Stoxx Europe 600 index SXXP, +2.63% traded 2.6% higher, while the FTSE 100 index UKX, +2.55% gained 2.5%.
In Asia markets, China’s benchmark CSI 300 index 000300, +1.50% closed 1.5% higher on Tuesday, while the Shanghai Composite Index SHCOMP, +1.44% picked up 1.4%, and the Japanese Nikkei NIK, +4.88% surged 4.9%. Hong Kong’s Hang Seng HSI, +2.38% climbed 2.4% and South Korea’s Kospi rose rallied 5.3%.
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