US stock index futures changed little during overnight trading on Monday, after the Dow and S&P closed at record highs amid optimism about the economic reopening.
Futures contracts linked to the Dow slid 45 points. S&P 500 futures were down 0.1%, while Nasdaq 100 futures were up 0.03%.
On Monday, the Dow rose 174 points during regular trading hours, hitting its 21st record at the intraday high of the year and its 14th record at the close of 2021. It was also the seventh consecutive positive session of the 30-share average – the longest daily gain streak since August.
The S&P 500 meanwhile gained 0.64% for its fifth positive session in a row. The benchmark index reached its 16th intraday high of the year and closed its 13th record.
The Nasdaq Composite was the relative outperformer on Monday with a gain of 1.05% and reclaiming some of its recent losses.
Shares of big tech companies and economic reopenings such as airlines led the major averages higher as the coronavirus vaccine rollout continues.
“The distribution of COVID-19 vaccines brings us closer to a fully reopened economy and is probably the single most important factor in assessing the economic growth outlook for 2021,” said LPL Financial strategists. “We expect interest rates to fade as a threat to the markets,” the company added.
The yield on 10-year government bonds traded around 1.6% Monday, after hitting its highest level in more than a year on Friday. The recent rise in bond yields has led to a rotation of growth names as the companies’ future cash flows start to look less attractive compared to other assets.
“After an outperformance cycle of approximately 14 years, the dominance of growth versus value peaked in the fall of 2020,” said Keith Lerner, chief market strategist at Truist. “We still see more upside in value relative to growth over the next 12 months, given the dramatic longer-term lag of Value and the US economy on the brink of the best growth in more than 35 years.”
On Tuesday, Lennar and CrowdStrike are among the companies that will report their earnings. February retail sales data will also be released, along with builders’ sentiment data from the National Association of Home Builders.
Meanwhile, the Federal Reserve will kick off its two-day meeting on Tuesday, followed by a statement and briefing from Chairman Jerome Powell on Wednesday.