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Dow futures moved higher in Monday’s overnight trading, putting the index on track to extend its rally from the regular session.
Dow futures rose about 150 points. S&P 500 futures were up 0.5% and Nasdaq 100 futures were up 0.6%.
On Monday, the Dow Jones Industrial Average gathered more than 300 points on investor optimism about the economic return of the pandemic. At its session high, the 30-stock average jumped 650 points to an intraday high.
The uptrend was fueled in part by the Senate’s passage of a $ 1.9 trillion stimulus and economic relief bill on Saturday, which is expected to include another round of stimulus checks. Banks, airlines, cruise lines and retailers have all risen in hopes of a strong economic recovery.
Additionally, the Centers for Disease Control and Prevention said on Monday that people who have been fully vaccinated against Covid-19 can safely meet indoors without a mask. The announcement came after the United States reached 3 million vaccinations over the weekend.
Tech stocks continued their recent weakness, with the Nasdaq Composite falling 2.4%. The high-tech benchmark closed more than 10% below its closing February 12 high, falling into correction territory.
The S&P 500 also ended the day down around 0.5%, led by stocks from Tesla, PayPal, Etsy and Advanced Micro Devices.
Lately, high-growth names have come under pressure from rising interest rates. The 10-year US Treasury yield stood at around 1.6% on Monday. However, hedge fund manager David Tepper said the recent steep rate hike is likely over and it’s hard to be bearish on equities right now.
“Monday’s initial rally was mainly due to news over the weekend that President Biden’s back-up plan had passed,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “Ultimately, however, equity investors are currently obsessed with bond yields that keep the tech sector of the Nasdaq and S&P 500 under pressure all day. Since the yield on 10-year bonds has failed. managed to retreat from the 1.6% level near the close today, the pressure on tech stocks intensified ahead of the close. ”
“Nonetheless, most of the stock market had a good day as small cap stocks and several reopening sectors posted solid gains,” added Paulsen.
The benchmark Russell 2000 small cap index gained about 0.5% on Monday.
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