U.S. stock futures remained flat on trading overnight on Tuesday as investors clung to the possibility of new fiscal stimulus before the end of the year.
Market participants are also looking at Wednesday’s Federal Reserve comments on the future of the U.S. economy.
Dow futures fell 11 points. The S&P 500 and Nasdaq 100 futures fell 0.06% and 0.05%, respectively.
On Tuesday, the main average recorded a series of negative sessions of several days, with all three indices closed with gains. The Dow Jones Industrial Average rose nearly 340 points, helped by a 5% jump in Apple shares. The S&P 500 rose 1.3%, reaching a 4-day losing streak.
The Nasdaq Composite finished the day up 1.25% on a new record. The Russell 2000 small capitalization index closed 2.4% at the close of a new record.
Investors applauded the events in Washington regarding a package of incentives to help Americans suffering from the economic ramifications of the Covid-19 pandemic.
House Speaker Nancy Pelosi invited congressional leaders, including Senate Majority Mitch McConnell, to discuss government funding and the relief package. On Monday, a bipartisan group of lawmakers released a proposal Monday night for another round of economic relief.
The first plan calls for $ 748 billion in spending on programs that appeal to both Republicans and Democrats, including federal unemployment benefits and additional Wage Protection Program loans. A second $ 160 billion bill would include the most controversial areas of corporate responsibility protection and financial aid to state and local governments.
“The stimulus remains a key focus for the market, as it is the necessary bridge for expansive vaccines,” Lindsey Bell, Ally Invest’s lead investment strategy, told clients. “Market participants would like to see an agreement sooner rather than later, given the expectation that economic data will slow in the short term. In the absence of an agreement, turbulence could increase.”
The stimulus deadline comes amid some of the darkest days of the pandemic. The United States records at least 215,400 new cases of Covid-19 and at least 2,300 virus-related deaths each day, based on a seven-day average calculated by CNBC using data from Johns Hopkins University.
Deployment of the Pfizer Covid-19 vaccine continued in the U.S. on Tuesday.
On Wednesday afternoon, the Federal Reserve will publish its statement with projections on the monetary policy stance. While the Fed’s long-term vision is expected to improve due to the vaccine, the central bank is expected to sound very obvious at the end of the meeting.
The bond market could have a volatile reaction based on what the Fed points out about its bond buying program.
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