Stock-index futures pointed to a higher start Monday, with the S&P 500 and Nasdaq Composite set to build on last week’s record finish, as investors showed optimism over a potential COVID-19 treatment.
What are major benchmarks doing?
Futures on the Dow Jones Industrial Average YM00, +1.00% advanced 283 points, or 1%, to 28,140, while S&P 500 futures ES00, +0.85% rose 28.90 points, or 0.9%, to 3,421.50. Nasdaq-100 futures NQ00, +0.98% were up 112 points, or 1%, at 11,674.
The S&P 500 SPX, +0.34% on Friday drifted higher by 0.3% in light volume to end at a record 3,397.16, marking a 0.7% weekly advance. The Dow DJIA, +0.68% rose 190.60 points, or 0.7%, on Friday to end the week with a gain of less than one point at 27,930.33. The tech-heavy Nasdaq Composite COMP, +0.41% logged a 2.7% weekly rise, finishing Friday at 11,311.80, its 36th record finish of 2020.
What’s driving the market?
The Food and Drug Administration on Sunday said it had approved the use of convalescent plasma, the antibody-rich component of blood taken from recovered COVID-19 patients, as a treatment for serious coronavirus cases. Medical experts said the treatment may provide benefits to those battling the disease, but that there isn’t conclusive evidence of its effectiveness, while questions remain about when it should be administered and dosage.
President Donald Trump hailed the move in a Sunday evening news conference after the administration had accused the agency without citing evidence of slowing approval in order to undermine his re-election prospects.
Also, the Financial Times reported that Trump may order the FDA to grant the same type of approval to the University of Oxford vaccine to be distributed by AstraZeneca AZN, +3.76% AZN, -1.38%.
“Markets have started the week on a cheery note as news that President Trump has authorized the emergency use of plasma treatment for COVID-19 patents and is considering fast tracking a UK vaccine before the election boosted sentiment,” said Raffi Boyadjian, investment analyst at XM, in a note.
Expectations for a breakthrough virus treatment have been a driving force behind the market’s rebound from its pandemic-induced plunge earlier this year, Boyadjian said, though “there’s yet to be any conclusive results from any of the vaccines or treatments that are under development for the coronavirus and many investors have yet to wake up to the prospect that the pandemic could still be around in a year or two.”
Read:Are stock market investors overpricing or underpricing a coronavirus vaccine?
The S&P 500 last week returned to record territory, erasing a nearly 34% plunge that took the U.S. benchmark from a record Feb. 19 close to its March 23 low, in a rally driven largely by shares of big tech companies that have seen their businesses benefit from the pandemic, while shares of companies whose performance is tied more closely to the economic cycle have continued to lag despite some recent stretches of outperformance.
Investors are looking ahead to the Kansas City Federal Reserve Bank’s annual symposium. The event, typically held in Jackson Hole, Wyo., will be conducted via web cast this year. Fed Chairman Jerome Powell is slated to speak Thursday on how the central bank plans to achieve its twin goals of stable prices and maximum employment once the coronavirus pandemic has ended.
What are other markets doing?
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.642% TMUBMUSD10Y, 0.642% rose 0.8 basis point to 0.64%. Bond prices move inversely to yields.
Gold futures GCZ20, +0.54% rose, with the December contract up 0.,6% at $1,958 an ounce on Comex. Oil futures CL00, +0.99% gained ground as Hurricane Marco and Tropical Storm Laura converged on the Gulf of Mexico, forcing the closure of around half of its production.
In global equity markets, China’s CSI 300 000300, +0.78% rose 0.8%, the Shanghai Composite SHCOMP, +0.14% ended 0.2% higher, and Japan’s Nikkei NIK, +0.28% closed with a gain of 0.3%. The Stoxx Europe 600 SXXP, +1.78% jumped 1.7% and U.K.’s FTSE benchmark UKX, +1.80% advanced 1.8%, getting a boost after the FDA announcement.
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