Stock futures remained stable in trading overnight on Monday after the S&P 500 suffered its first decline at the start of a year since 2016.
Dow Jones industrial average futures fell 10 points. The S&P 500 futures were flat and the Nasdaq 100 futures fell less than 0.1%.
Futures movements came after strong sales on Wall Street to start in 2021. The S&P 500 fell 1.5%, recording the worst daily performance since October 27th. Ten of the 11 S&P 500 sectors recorded losses, led by real estate. .
The blue Dow added 382 points after falling to 700 points on its daily low. The Nasdaq Composite fell 1.4% as the FAANG block collapsed to start the new year.
The broad market sale came ahead of Georgia’s second-round election, which will determine whether Republicans can maintain control in the Senate. Meanwhile, the rise in Covid-19 cases globally and new blocking restrictions continued to keep investors on the edge.
“Investors are feeling upset this week,” Lindly Bell, chief investment strategist at Ally Invest, said in an email. “COVID cases continue to rise, with a new variant of the virus spreading around the world. Tomorrow’s races in Georgia could decide the composition of the Senate and the market as a whole has performed better in a divided Congress.”
Many fear that rising tax rates and more progressive policies could become a reality if Democrats gain control of the Senate. However, this result could create an opportunity for a larger and faster spending package, which will help support the market.
“Even if Democrats gain control, the margin will be remarkably narrow and analysts are skeptical about whether a significant change in fiscal or regulatory policy is possible,” said Mark Hackett, head of investment research at Nationwide. “However, control of Democrats could lead to another round of coronavirus stimulus and potentially an infrastructure package.”
On Monday, England imposed a third coronavirus blockade as the region faced a more transmissible variant of Covid-19. New York State has confirmed its first case of the new strain, Gov. Andrew Cuomo said Monday.
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