Traders on the trading floor of the New York Stock Exchange.
Source: NYSE
US stock futures rose higher during overnight trading, pointing to gains at Monday’s opening, continuing last week’s rally that led the Dow and S&P 500 to record highs.
Dow futures were up 70 points. S&P 500 futures were up 0.15% and Nasdaq 100 futures were up 0.05%.
Shares rose last week with the Dow Jones Industrial Average rising 4% and the S&P 500 rising 2.6%. The S&P 500 and the Dow both closed at record highs on Friday.
The Nasdaq Composite was up 3% last week despite a sell-off on Friday spurred by rising interest rates. The rise in bond yields has challenged growth stocks in recent weeks and sent investors to cyclical parts of the market. The Nasdaq is up less than 1% this month, while the Dow and S&P are up 6% and 3.5% respectively.
The US 10-year Treasury hit its highest level in more than a year on Friday. The benchmark Treasury bill reached 1.642%, its highest level since February 2020.
The small-cap benchmark Russell 2000 rose more than 7% last week as investors moved to smaller stocks benefiting from a sharp economic comeback.
Last week, investors applauded the $ 1.9 trillion stimulus package legally signed by President Joe Biden. The IRS began processing $ 1,400 direct payments on Friday, and checks started hitting bank accounts over the weekend. The bill will also put nearly $ 20 billion in vaccinations against Covid-19 and $ 350 billion in aid from the state, local and tribal governments.
Investors will prepare for Tuesday and Wednesday’s Federal Open Market Committee meeting, where the Federal Reserve will issue its decision on interest rates. The bond market in the coming week is likely to follow the signals from the Federal Reserve.
The central bank is expected to recognize much better growth in the economy. Bond professionals are also looking at whether Fed officials will adjust their interest rate outlook, which now does not include rate hikes until 2023.
Goldman Sachs chief economist David Kostin told his clients on Sunday that he expects interest rates to continue to rise in the coming months and that investors will have to “continually grapple with concerns about economic overheating and Fed tightening.”
In the field of vaccines, Biden announced last week that he would instruct states to make all adults eligible for the vaccine by May 1. Biden also set a goal for Americans to meet in person with their friends and loved ones in small groups on the Fourth of July.