Pedestrians walk in the snow past the Wall Street subway station at the New York Stock Exchange.
Michael Nagle | Bloomberg | Getty Images
Futures contracts linked to the major US stock indices rose at the start of extensive Monday night trading after ending strong last week.
Dow futures were up 180 points, suggesting an implied opening of about the same size, while S&P 500 contracts added 19.25 points or 0.5%. Nasdaq 100 futures hit 67.5 points or 0.5%.
The US stock market was closed on Monday for Presidents Day.
The big averages ended with decent gains last week, even as the February rally seemed to cool down somewhat. The blue-chip Dow Jones Industrial Average recorded two little-changed days, while the S&P 500 hovered within 0.2% three days in a row.
Still, the S&P 500 ended the week with a gain of 1.2%, while the Dow added 1%. The tech-heavy Nasdaq Composite rose 1.7%. All three closed at record levels on Friday.
Stock strategists say the rollout of the Covid-19 vaccine, the economic reopening and the expectation for more fiscal stimulus are key to the market’s booming February so far.
“Covid is far from beaten, but the path to economic normalization is clearer as more vaccines are approved that reduce hospital admissions and eliminate fatalities,” Dennis DeBusschere, strategist at Evercore ISI, said in an email.
“Minister of Finance [Janet] Yellen’s strong arguments for extra incentive followed by Fed Chair [Jerome] Powell, who described maximum employment as “our national goal,” helped boost bond yields, inflation expectations and oil prices last week, “he added.
The Dow is up 4.9% in February, while the S&P 500 and Nasdaq are up 5.9% and 7.8% respectively. The S&P 500 has set ten closing records by 2021.
Still, DeBusschere warned that rising interest rates and uncertain policy outlook could keep trading from becoming too frothy in the near term, advising investors to hold on to cyclical stocks that could see the most upward as the US economy recovers.
Those so-called cyclical sectors, most sensitive to an economic recovery, led the rally in February. Energy is up more than 13% in the month so far, with financial data and materials also among the leading sectors.
In company news, CVS Health, Occidental Petroleum, Palantir and others will report earnings on Tuesday.
Executives from Robinhood, Melvin Capital and Citadel will testify before the House Financial Services Committee Thursday. Lawmakers are likely to grill the group at the wild trade of GameStop and other heavily short stocks.
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