U.S. stock index futures changed little in Tuesday morning trading after a session in which stocks alternated between gains and losses.
Futures contracts linked to the Dow Jones Industrial Average fell 20 points. The S&P 500 and Nasdaq 100 futures fell 0.09% each.
The stock closed with little change on Tuesday, with traders digesting higher rates, possible additional stimulus measures and political turmoil.
The Dow Jones Industrial Average rose 60 points, or 0.2%, to 31,068.69. The Nasdaq Composite ended the day up 0.3% and the S&P 500 rose slightly to 3,801.19. Meanwhile, the 10-year Treasury yield was briefly traded at 1.18%, its highest level since March.
In view of the increase, Credit Suisse recommended that investors favor the pro-cyclical sectors, including finance and energy. Rising rates could hurt growth stocks, however, and several technology heavyweights, including Facebook and Apple, fell during Tuesday’s session.
The expectation of additional fiscal stimulus is one of the reasons behind the steady upward movement in earnings. President-elect Joe Biden is due to release details of his economic plan on Thursday.
“At a minimum, even a $ 500 billion tax package consisting of additional stimulus checks, extended unemployment benefits and health financing and vaccine disbursements will be another boost for economic growth in 2021,” noted Jason Draho, head of UBS Global Wealth Management of the Americas Asset allocation.
After the session changes on Tuesday, the main averages remain lower in the week after Monday’s fall. The Nasdaq Composite is the relative worst performer, dropping about 1% in the past two sessions. The small print is, however, a plus, and the Russell 2000 is up 1.7% so far this week.
The changes come as the turmoil in Washington continues. The House, held by the Democrats, will vote on Tuesday night for a resolution asking Vice President Mike Pence and the Cabinet to invoke the 25th Amendment to expel Trump from the White House.
Covid’s cases also continue to increase in the United States and abroad. The US is reporting at least 248,650 new cases of Covid-19 and at least 3,223 virus-related deaths each day, based on an average of seven days calculated by CNBC using data from Johns Hopkins University.
Still, many say the United States is ready to grow again this year.
“In 2021, the U.S. economy is expected to experience strong favorable winds from additional fiscal and monetary stimulus coupled with an end to the pandemic’s impact on the economy,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. “The pent-up demand in industries impacted by COVID-19 … and a necessary stock rebuild should further stimulate job growth,” he added.
Taken together, Schutte said it sets the stage for above-average economic growth, and he sees stocks rising to new highs.
– Jacob Pramuk, from CNBC, contributed reporting.
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