U.S. equities futures rose lower on Friday as some investors worried that the $ 1.9 trillion Covid-19 relief plan by President-elect Joe Biden could lead to higher taxes.
Futures linked to the S&P 500 fell 0.3%, indicating that the benchmark may decline for a second day. Contracts linked to the Nasdaq-100 fell less than 0.1% and those linked to the Dow Jones Industrial Average fell 0.3%.
The S&P 500 is on track to end the week lower, erasing some of the gains made in early January, when the indicator rose to a record high. Markets have for weeks encouraged Democrats’ plans to expand government spending and bolster the economic rebound. But the size of Mr Biden’s plans, set on Thursday at the end, served to check some of that optimism.
“The magnitude was obviously surprisingly on the rise,” said Wei Li, head of fund investment strategy and investments at BlackRock’s publicly traded indexes for Europe, the Middle East and Africa. “With the majority of the Senate, [taxes] it could happen in the medium term and the market should appreciate that too. ”
Investors expect additional spending to help drive the U.S. economy through a winter that has experienced high rates of Covid-19 infection and worsening economic data. Figures released on Thursday showed that the number of workers applying for unemployment benefits saw their biggest weekly increase since the pandemic hit last March.