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Pedestrians walk in the snow in front of the Wall Street subway station, near the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images
Futures contracts linked to major US stock indexes rose at the start of extended trading Monday night after finishing strong last week.
Dow futures rose 180 points, suggesting an implied open of about the same magnitude, while S&P 500 contracts added 19.25 points, or 0.5%. Nasdaq 100 futures gained 67.5 points, or 0.5%.
The US stock market was closed Monday for Presidents Day.
Major averages ended last week with decent gains even as the February rally appeared to have cooled off somewhat. The blue-chip Dow Jones Industrial Average posted two days of little change, while the S&P 500 moved below 0.2% for three consecutive days.
Still, the S&P 500 ended the week with a gain of 1.2%, while the Dow added 1%. The highly technological Nasdaq Composite rose 1.7%. All three closed at record highs on Friday.
Stock market strategists believe the deployment of the Covid-19 vaccine, economic reopening and expectations of more fiscal stimulus are key to the market’s strength in February so far.
“Covid is far from over, but the path to economic normalization is clearer as more vaccines that reduce hospitalizations and eliminate deaths are approved,” said Dennis DeBusschere, strategist at Evercore ISI, in an email.
“Secretary of the Treasury [Janet] Yellen’s convincing arguments for further stimulus followed by Fed chairman [Jerome] Powell describing maximum employment as “our national target” helped raise bond yields, inflation expectations and oil prices last week, “he added.
The Dow Jones gained 4.9% in February, while the S&P 500 and the Nasdaq rose 5.9% and 7.8% respectively. The S&P 500 set ten records in 2021.
Nonetheless, DeBusschere warned that rising interest rates and an uncertain political outlook could prevent trading from getting too foamy in the near term, and advised investors to stick to cyclical stocks which could see the most benefit. as the US economy recovers.
These so-called cyclical sectors, the most sensitive to an economic rebound, led the rally in February. Energy is up more than 13% since the month, with finance and materials also among the main sectors.
In business news, CVS Health, Occidental Petroleum, Palantir and others will release their results on Tuesday.
Executives from Robinhood, Melvin Capital and Citadel are scheduled to testify before the House Financial Services Committee on Thursday. Lawmakers are expected to grill the group on wild trading of GameStop and other heavily sold stocks.
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