Futures pointed to a bounce for U.S. stocks Tuesday, after talks toward a new round of fiscal stimulus between the Trump administration and House Democrats appeared to make progress.
What are major benchmarks doing?
Futures on the Dow Jones Industrial Average YM00, +0.65% rose 190 points, or 0.7%, to 28,290, while S&P 500 futures ES00, +0.75% were up 25.80 points, or 0.8%, to 3,448.50. Nasdaq-100 futures NQ00, +0.78% advanced 93.50 points, or 0.8%, to 11,743.75.
The Dow DJIA on Monday lost 410.89 points lower, or 1.4%, to close at 28,195.42, after trading as high as 28,711.93. The S&P 500 SPX finished 56.89 points lower, or 1.6%, at 3,426.92, after briefly rising above the 3,500 level. The Nasdaq Composite COMP ended at 11,478.88 after falling 192.67 points, or 1.7%.
What’s driving the market?
Stocks stumbled Monday as hopes for a pre-election stimulus deal appeared to fade ahead of a Tuesday deadline set by House Speaker Nancy Pelosi, D-California. But talks between Pelosi and Treasury Secretary Steven Mnuchin continued, with Pelosi ‘s office late Monday saying that the pair continued to narrow their differences. Pelosi and Mnuchin are set to talk further Tuesday, which Pelosi has said is a deadline for lawmakers to pass a plan ahead of the Nov. 3 presidential election.
While Trump has increased his offer for an aid package to $1.8 trillion Senate Republicans are still seen resisting a large spending package.
“The prospects for an actual deal still remain minuscule as the Republicans in the Senate vehemently oppose the size of the stimulus discussed, but hope runs eternal in the markets and investors continue to remain optimistic that if some sort of deal is reached between the White House and the House of Representatives then the momentum and pressure from Trump will force the Senate to cave and approve the package,” said Boris Schlossberg, managing director for FX at BK Asset Management, in a note.
Investors, meanwhile, were sifting through a deluge of corporate earnings this week, with dozens of S&P 500 companies and several Dow components due to release third-quarter results this week.
On the economic calendar, Randal Quarles, the Federal Reserve’s vice chair for financial stability, was scheduled to speak at the Sifma annual meeting at 10:50 a.m. Eastern, while Chicago Fed President Charles Evans is slated to deliver a speech on the outlook to the Detroit Economic Club at 1 p.m. Atlanta Fed President Raphael Bostic was set to take part in a panel discussion on housing at the Penn Institute for Urban Research at 5 p.m.
Data on September housing starts and building permits are due at 8:30 a.m. Eastern. Economists surveyed by MarketWatch, on average, expect starts to come in at a 1.45 million annual pace, while permits are seen at a 1.518 million pace.
Which companies are in focus?
- Shares of International Business Machines Corp. IBM, -0.32% were down 2.8% in premarket trade after the computing giant late Monday reported that third-quarter revenue fell.
- Investors were awaiting results ahead of the opening bell from a number of heavyweights, including Procter & Gamble Co. PG, -1.71%, Philip Morris International Inc. PM, -1.80%, Travelers Cos. Inc. TRV, -1.30% and Lockheed Martin Corp. LMT, -0.72%.
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