U.S. stock futures fell on Friday as some investors were concerned that President-elect Joe Biden’s $ 1.9 trillion Covid-19 relief plan could lead to higher taxes.
Futures linked to the S&P 500 fell 0.3%, indicating that the benchmark could fall for the second day. Contracts linked to the Nasdaq-100 fell less than 0.1% and those linked to the Dow Jones Industrial Average fell 0.3%.
The S&P 500 is on track to end the week low, erasing some of the gains made in early January, when the indicator hit a record high. For weeks, markets have applauded Democrats’ plans to expand government spending and spur economic recovery. But the size of Biden’s plans, drawn up on Thursday night, served to check some of that optimism.
“The magnitude obviously surprised positively,” said Wei Li, head of investment strategy for BlackRock’s exchange-traded fund and investment in indices for Europe, the Middle East and Africa. “With the majority in the Senate, [taxes] it may be arriving in the medium term and this is something that the market should also evaluate. ”
Investors hope that additional spending will help guide the US economy during a winter that saw high rates of Covid-19 infection and worsening economic data. Figures released on Thursday showed that the number of workers applying for unemployment insurance registered its biggest weekly gain since the pandemic last March.