Stock Futures Open Slightly After Record S&P 500 Close

Stock futures opened near the flat line on Tuesday night, after the S&P 500 broke February highs to set a new high earlier today.

Tuesday’s advance by the S&P 500 took its total gain from its March lows to 52%. And by breaking its previous closing high, the S&P 500 ended the shortest bear market on record, or the period after the stock market fell 20% from peak to trough.

Tuesday’s advance came as shares of big tech stocks rallied again, with Amazon (AMZN) shares rising 4% to its own record after the company announced plans to add thousands of additional jobs at major hubs across the country. The rise of tech names – and the Nasdaq Composite, which also hit another record on Tuesday – mirrored the trend in recent months in stock markets, with investors focusing heavily on software and tech names like a defensive game against the pandemic and hold commands in place.

Yet the market’s rally to new highs comes as millions of Americans remain unemployed in the grip of the coronavirus pandemic and the prospects for another fiscal stimulus package are balanced.

But as many analysts have noted, the market has ruled out the future rather than the present, with a plethora of new data arriving better than expected and on an improving path from trends seen earlier this spring. Virus growth rates have started to slow even in recent epicenters in the South and West. And data on the housing market, retail sales and manufacturing activity showed pockets of the economy that have at least started to recover some of the damage done during the height of hold-up orders.

“Many people think that the market does not accurately reflect the severity of the underlying health and economic crisis – this is because the market is focused on the future versus what is happening in real time,” Peter Giacchi, head of the designated market maker trading floor for Citadel Securities, said in an email.

“The reason we saw record real-time lows early in the pandemic was the uncertainty surrounding the virus,” he added. “Now that investors are in some degree in control, the movements have become more forward-looking, more optimistic and the market is behaving as it always has so far.”

Looking ahead to Wednesday, another group of large retailers are expected to release their results, including Lowe’s (LOW), Target (TGT) and TJX Companies (TJX). On Tuesday, The Home Depot and Walmart each reported second quarter sales and profits that far exceeded expectations, but guided into an uncertain second half as the pandemic continues and after direct checks and unemployment benefits improvements for consumers have declined. The results and comments prompted peer retailers Lowe’s and Target, respectively, to report similar trends.

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6:07 p.m. ET Tuesday: Stock futures open flat after record closes

Here are the major movements in the stock markets, at 6:07 p.m. ET:

• S&P 500 Futures (ES = F): 3,387.00, flat

• Dow Futures (YM = F): 27,719.00, up 2 points, or 0.01%

• Future Nasdaq (NQ = F): 11,406.75, down 2.5 points, or 0.02%

More

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