Traders on the floor of the New York Stock Exchange.
Source: NYSE
U.S. stock futures soared in the overnight trade and pointed to gains at the opening on Monday, continuing last week’s recovery that took the Dow and S&P 500 to record highs.
Dow futures were up 70 points. S&P 500 futures gained 0.15% and Nasdaq 100 futures rose 0.05%.
Shares rose last week, with the Dow Jones Industrial Average rising 4% and the S&P 500 gaining 2.6%. The S&P 500 and Dow closed at record highs on Friday.
Nasdaq Composite advanced 3% last week, despite liquidation on Friday fueled by rising interest rates. The jump in bond yields has challenged growth stocks in recent weeks and sent investors into cyclical pockets of the market. Nasdaq was up less than 1% this month, while Dow and S&P were up 6% and 3.5%, respectively.
The US Treasury in 10 years reached its highest level in more than a year on Friday. The reference Treasury note reached 1.642%, its highest level since February 2020.
The Russell 2000 small cap benchmark rose more than 7% last week, with investors shifting to smaller stocks that benefit from a strong economic recovery.
Last week, investors applauded the $ 1.9 trillion stimulus package that President Joe Biden signed into law. The IRS started processing direct payments of $ 1,400 on Friday and checks began to reach bank accounts over the weekend. The project will also put nearly $ 20 billion in vaccines from Covid-19 and $ 350 billion in aid from the state, local and tribal government.
Investors will be preparing for the Federal Open Market Committee meeting on Tuesday and Wednesday, where the Federal Reserve will issue its decision on interest rates. The bond market next week is likely to follow the Federal Reserve’s hints.
The central bank must recognize much better growth in the economy. Bond professionals are also on the lookout to see if Fed officials will adjust their outlook for interest rates, which now include no rate hikes until 2023.
Goldman Sachs Chief Economist David Kostin told customers on Sunday that he expects interest rates to continue to rise in the coming months and that investors will have to “continually deal with anxiety about the economic overheating and the tightening of the Fed” .
In front of the vaccine, Biden announced last week that he would advise states to make all adults eligible for the vaccine by May 1. Biden also set a goal so that Americans could meet in person with their friends and loved ones in small groups to celebrate the fourth of July.