Traders work on the floor of the New York Stock Exchange.
US equity futures jumped Sunday evening as a fresh stimulus package from Washington headed toward the final passage this week.
Futures linked to the Dow Jones Industrial Average jumped 219 points, or 0.7%. Those of the S&P 500 and Nasdaq 100 composite index rose 0.5% and 0.6%, respectively.
The move in futures contracts came after the Senate, A. $ 1.9 trillion to ease the economy and stimulus bill on Saturday, Paving the way for unemployment benefits extensions, another round of stimulus checks and assistance for state and local governments. The Democratic-controlled House of Representatives is expected to pass the bill later this week. President Joe Biden is expected to sign it into law before the unemployment aid programs expire on March 14.
The new round of government spending could cause ripples in the US Treasury market, as the benchmark 10-year yield has risen sharply in recent weeks. The Yield increased to 1.62% The Friday after the start of the calendar year is below the 1% mark.
The rapid movement in the bonds has worried equity investors as well, contributing to the weakness of the highly rated stocks.
10-year Treasury rate-linked futures fell 0.2% on Sunday night at the opening of trading, indicating higher returns.
Mike Wilson, chief US equities analyst at Morgan Stanley, said in a note: “The 10-year yield has finally returned to other asset markets. This is putting pressure on valuations, especially for the more expensive stocks that have reached Raaf’s valuations.
The stock market is coming out of Friday afternoon rally Who has taken some stinging from a rough week for high-flying momentum names. Heavy technology Nasdaq It ended the week to date with a loss of 2.1%, instead Standard & Poor’s 500 0.8% gain. The Daw, The most dependent on cyclical stocks, was up 1.8%.
Morgan Stanley’s Wilson said Friday’s shift does not indicate that the recent market weakness is over, but the difference between tech and spin-offs shows that the bullish story remains the same.
“The bull market remains under the hood, with value and cyclical leading the way,” Wilson said.
On the economic front, investors will take a look at wholesale inventory data from January on Monday. Several economic measures in recent weeks have shown an increasingly strong recovery, including A. Better than expected jobs for February The report was released on Friday.