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Stock-index futures edged higher Tuesday, indicating a modest bounce for equities a day after a selloff for technology shares pulled major benchmarks back from record levels.
What are major benchmarks doing?
- Futures on the Dow Jones Industrial Average YM00, +0.10% rose 68 points, or 0.2%, to 30,970.
- S&P 500 futures ES00, +0.05% gained 8.25 points, or 0.2%, to trade at 3,800.25.
- Nasdaq-100 futures NQ00, +0.02% were up 20 points, or 0.2%, at 12,917.
Stocks pulled back Monday after ending last week at record levels. The tech-heavy Nasdaq Composite COMP, -1.25% led the way lower, falling 1.3%, while the Dow DJIA, -0.29% fell 0.3% and the S&P 500 SPX, -0.66% declined 0.3%.
What’s driving the market?
Stocks wobbled Monday as investors paid heed to a rise in U.S. Treasury yields and a steepening of the yield curve, as well as concerns that efforts to impeach President Trump for his role in encouraging a violent mob to attack the Capitol last week could hamper efforts to craft another round of fiscal stimulus.
But analysts said investors were largely shrugging off political risks around impeachment as well as prospects for further civil unrest as President-elect Joe Biden’s inauguration approaches on Jan. 20.
Equities appeared to be underpinned by related optimism over prospects for another large round of aid spending after President-elect Biden takes office with Democrats in control of the Senate and House. Last Friday Biden called for extra financial relief for Americans “now” after the December U.S. jobs report showed losses for the first time in eight months. Biden is due to detail his spending plans Thursday, has called for “trillions” in additional spending.
“The fall in stocks yesterday needs to be put in the context of the large gains that were posted last week,” said David Madden, market analyst at CMC Markets, in a note.
“For some time there was chatter that equities were looking lofty so a move to the downside wasn’t exactly a surprise,” he said. “In recent sessions, the speculation that President-elect Joe Biden will map out new stimulus plans has dominated the headlines. Also the vaccine news is assisting the upbeat sentiment.”
In U.S. economic data Tuesday, the small-business optimism index compiled by the National Federation of Independent Business fell by 5.5 points to 95.9 last month, marking its lowest level since last May.
Data on November job openings is due at 10 a.m. Eastern.
Several Federal Reserve officials are scheduled to make appearances Tuesday, including Gov. Lael Brainard, who will speak about artificial intelligence at a conference sponsored by the central bank at 9:35 a.m.
Atlanta Fed President Raphael Bostic is scheduled to speak at a Goldman Sachs event at 9:30 a.m.
Boston Fed President Eric Rosengren, Dallas Fed President Robert Kaplan and Minneapolis Fed President Neel Kashkari attend an event on racism and the economy at 11 a.m. Cleveland Fed President Loretta Mester is scheduled to speak at European Economics and Financial Center at noon.
Kansas City Fed President Esther George is slated to speak on the U.S. economy and monetary policy to the Central Exchange at 1 p.m.
Which companies are in focus?
- Shares of Zoom Video Communications Inc. ZM, -3.40% were down 1.7% in premarket trade after announcing it had commenced an underwritten offering of $1.5 billion of Class A shares.
- Walmart Inc. WMT, +0.45% shares were up more than 1% after the retailer said it would work with Ribbit Capital LEAP, -2.85% to create a new fintech startup. Ribbit shares were up more than 10%.
- U.S.-listed shares of Nio Inc. NIO, +6.42% edged lower in premarket trade after back-to-back record closes. Pressure came after Citigroup analyst Jeff Chung toned down his bullish stance on the China-based electric vehicle maker, citing concerns over competition from Tesla Inc. TSLA, -7.82%. Also, Nio said late Monday it was offering $1.3 billion in convertible debt, which can be converted after Aug. 1, 2025 to shares or cash.
- Shares of Becton Dickinson & Co. BDX, +0.80% rose more than 2% in premarket action after the medical technology company delivered an upbeat outlook for its first quarter.
- Boston Scientific Corp. BSX, -0.84% shares were lower after the medical technology company provided a fourth-quarter sales outlook that was below Wall Street forecasts.
What are other assets doing?
- The yield on the 10-year Treasury note TMUBMUSD10Y, 1.166% rose 3.3 basis points to 1.165%. Yields and bond prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, +0.04%, a gauge of the currency against a basket of six major rivals, was off 0.1%.
- Oil futures pushed higher, with the U.S. benchmark CL.1, +1.21% up 1.2% at $52.90 a barrel. Gold futures GC00, -0.36% edged higher, up 0.3% near $1,856 an ounce.
- The pan-European Stoxx 600 index SXXP, -0.05% edged 0.1% lower, while London’s FTSE 100 UKX, -0.68% dropped 0.7%.
- In Asia, the Shanghai Composite SHCOMP, +2.18% rose 2.2%, while Hong Kong’s Hang Seng Index HSI, +1.32% rose 1.3% and Japan’s Nikkei 225 index NIK, +0.09% edged up 0.1%.
