The futures on the US stock index changed little during overnight trading on Tuesday, following a session where stocks saw gains and losses alternately.
Futures contracts linked to the Dow Jones Industrial Average fell 20 points. S&P 500 futures and Nasdaq 100 futures each declined 0.09%.
Stocks closed little on Tuesday as traders digested higher interest rates, possible additional stimulus measures and political unrest.
The Dow Jones Industrial Average was up 60 points, or 0.2%, to 31,068.69. The Nasdaq Composite ended the day at 0.3% and the S&P 500 rose slightly to 3,801.19. Meanwhile, the benchmark 10-year Treasury yield traded briefly at 1.18%, its highest level since March.
Given the increase, Credit Suisse advised investors to prefer pro-cyclical sectors, including financial services and energy. Rising prices could hurt growth stocks, however, and a number of tech heavyweights, including Facebook and Apple, fell during Tuesday’s session.
The expectation for additional fiscal stimulus is one of the reasons behind the steady increase in revenues. President-elect Joe Biden is expected to reveal details of his economic plan on Thursday.
“At the very least, even a USD 500 billion tax package consisting of additional incentive controls, extended unemployment benefits, and funding for health care and vaccine disbursements will provide new impetus for economic growth in 2021,” said Jason Draho, UBS Global Wealth Management head of America asset allocation.
After Tuesday’s muted session, the main averages remain lower for the week following Monday’s decline. The Nasdaq Composite is the relative underperformance, down about 1% in the past two sessions. Small caps are a bright spot, though, and the Russell 2000 is up 1.7% so far this week.
The moves come as unrest in Washington continues. The Democrats-run House will vote Tuesday night on a resolution calling on Vice President Mike Pence and the cabinet to call in the 25th Amendment to oust Trump from the White House.
Covid cases also continue to increase in the US and abroad. The US records at least 248,650 new Covid-19 cases and at least 3,223 virus-related deaths every day, based on a seven-day average calculated by CNBC based on data from Johns Hopkins University.
Still, many say the US is ready to grow again later this year.
“In 2021, the US economy should experience strong tailwinds from additional fiscal and monetary stimulus measures coupled with an end to the impact of the pandemic on the economy,” said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. “Pent-up demand in industries affected by COVID-19 … and a necessary inventory rebuild should further drive job growth,” he added.
All in all, Schutte said this paves the way for above-average economic growth, and sees stocks soar to new highs.
– CNBC’s Jacob Pramuk contributed to the reporting.
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