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Market Snapshot: S&P 500 ready to stake out new high as stock futures rise, while travel stocks fall amid COVID disruption

Will the S&P 500 hold on to record highs or even extend them? Investors will find out Monday when they return for the last week of trading for 2021. Read More...

U.S. stock futures were rising on Monday, with technology set to take the lead, while the S&P 500 was hinting at another record as the last week of trading for the year gets under way.

But premarket trading showed travel-related names under pressure after surging COVID-19 cases triggered hundreds of U.S. flights to be scrapped.

How are stock-index futures trading?

Ahead of the long holiday weekend, Thursday’s session saw the S&P 500 rise 0.6% to 4,725.79, a new closing record. The Dow Jones Industrial Average  DJIA, +0.55% gained 196.67 points, or 0.6%, to end at 35,950.56 and the Nasdaq Composite COMP, +0.85% climbed 0.9% to 15,653. For the week, the Dow rose 1.7%, the S&P 500 gained 2.3% and Nasdaq added 3.2%.

What’s driving the stock market?

Optimism that the latest wave of COVID-19 won’t disrupt the economy pushed stocks higher last week. That’s even as coronavirus upended Christmas travel, and White House medical adviser Dr. Anthony Fauci warned against complacency over the omicron variant, which he said could end up swamping hospitals even if many infections appear mild.

Thousands of flights were canceled across the globe over the weekend as surging COVID-19 infections triggered quarantines for airline staff. Shares of American Airlines AAL, , Delta Air Lines DAL, +0.43% and United Airlines UAL, +0.67% were down over 2% in premarket trading, with cruise operator Carnival CCL, -0.24% down nearly 3%.

Read: Caribbean cruise denied entry by ports due to COVID-19 outbreak

While travel was a mess, the retail side of the economy appeared to be holding up, with Mastercard Spending Pulse reporting that holiday sales rose 8.5% against a year earlier, the biggest annual gain in 17 years.

The week ahead may see lower volumes than normal, as investors take an extended break. Many will be watching out for the start of the so-called Santa Claus rally, a seasonally bullish period in the last five trading sessions of a year and the first two in the new year.

Read: The stock market hasn’t been this stomach-churning in December since 2018. Here’s the setup for the year’s final week.

“The focus among investors and traders continues to remain on three important factors. Firstly, the economic data — traders would like to see more strength in the economic numbers, then you have the ongoing omicron COVID infection ratio — this is increasing for the last number of weeks, and finally the hawkish monetary policy stance among central bankers,” said Naeem Aslam, chief market analyst at AvaTrade.

Aslam said there are concerns that post-New Year’s Eve will see more spikes in infections, or governments clamping down ahead of time.

“The fact is that no one wants to see another total lockdown as they have an adverse influence on the economy. The world is still suffering from supply bottleneck shortages due to COVID restrictions introduced last year,” he said, in a note to clients.

What stocks are in focus?
How are other assets trading?
  • The yield on the 10-year Treasury note TMUBMUSD10Y, 1.485%  slipped slightly to 1.482%. Yields and debt prices move opposite each other.
  • The ICE U.S. Dollar Index  DXY, +0.17%,  a measure of the currency against a basket of six major rivals, was 0.2% higher.
  • Oil futures fell, with the U.S. benchmark  CL00, -0.50% down 1% to $73.08 a barrel, while gold futures  GC00, -0.16% fell 0.4% to $1,806 an ounce.
  • Bitcoin BTCUSD, 0.06% gained 0.1% to $50,817.
  • The Stoxx Europe 600 index  SXXP, +0.53% was up 0.4%, while London markets were closed.
  • The Shanghai Composite  SHCOMP, -0.06%  was flat, while the Hang Seng Index  HSI, +0.13%  was closed and Japan’s Nikkei 225  NIK, -0.37% fell 0.3%.

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