The Dow futures are rising, extending the 300-point rally on Monday
The Dow futures rose in overnight trading on Monday, pulling the index on track to extend its rally from the regular session.
Dow futures rose 120 points. S&P 500 futures rose 0.4% and Nasdaq 100 futures rose 0.5%.
On Monday, the Dow Jones Industrial Average rose more than 300 points on investor optimism about the economic comeback of the pandemic. At its session high, the average of 30 stocks rose 650 points to hit an intraday record.
The uptrend was fueled in part by the Senate’s passage on Saturday of a $ 1.9 trillion Economic Facilitation and Incentive Act that is slated to include another round of economic reviews. Banks, airlines, cruise lines and retailers all rebounded in hopes of a strong economic recovery.
In addition, the Centers for Disease Control and Prevention announced on Monday that people fully vaccinated against Covid-19 can safely meet indoors without masks. The announcement came after the US hit 3 million vaccinations over the weekend.
Technology stocks continued their recent weakness as the Nasdaq Composite fell 2.4%. The tech-heavy benchmark closed more than 10% below its February 12 closing high and fell into correction territory.
The S&P 500 also ended the day down around 0.5%, hurt by stocks in Tesla, PayPal, Etsy and Advanced Micro Devices.
The high-growth names have recently come under pressure from rising interest rates. The yield on 10-year US Treasuries was around 1.6% on Monday. However, hedge fund manager David Tepper said the recent sharp rise in interest rates is likely over and it’s difficult to see stocks bearishly right now.
“Monday’s first rally was largely driven by news over the weekend that President Biden’s aid package had passed,” Jim Paulsen, chief investment strategist at Leuthold Group, told CNBC. “Ultimately, however, stock investors are obsessed with bond yields right now, which is keeping the technology sector Nasdaq and S&P 500 under pressure all day. Tech stocks intensified until the end.”
“Even so, most of the equity markets had a fine day as small cap stocks and several reopening sectors posted healthy gains,” added Paulsen.
The small-cap benchmark Russell 2000 gained around 0.5% on Monday.