U.S. stock market futures changed little during trading overnight on Tuesday, following a session that saw stocks alternate between gains and losses.
Futures contracts tied to the Dow Jones industrial average slipped 20 points. The S&P 500 and Nasdaq 100 futures each fell 0.09%.
Closed stocks varied little on Tuesday as traders digested higher rates, possible additional stimulus measures and political turmoil.
The Dow Jones Industrial Average rose 60 points, or 0.2%, to 31,068.69. The Nasdaq Composite finished the day up 0.3% and the S&P 500 rose slightly to 3,801.19. Meanwhile, the 10-year benchmark Treasury yield traded briefly at 1.18%, its highest level since March.
Faced with the increase, Credit Suisse advised investors to favor the pro-cyclical sectors, including finance and energy. However, the rise in rates could hurt stock growth, and several technology weights, including Facebook and Apple, declined during Tuesday’s session.
Expectations for additional fiscal stimulus are one of the reasons why there is a steady increase in yields. President-elect Joe Biden is expected to release details of his economic plan on Thursday.
“At the very least, even a $ 500 billion fiscal package consisting of additional stimulus controls, expanded unemployment benefits and funding for health care and vaccine disbursement will be another boost to economic growth in 2021, ”noted Jason Draho, America’s head of UBS Global Wealth Management Asset Allocation.
After Tuesday’s silent session, the main averages remain lower for the week following Monday’s slide. The Nasdaq Composite is the relatively low yield, with a drop of approximately 1% in the last two sessions. However, major capitalization is a bright spot and the Russell 2000 has risen 1.7% so far this week.
The movements occur as the turmoil in Washington continues. The Democracy House will vote Tuesday night on a resolution calling on Vice President Mike Pence and the cabinet to invoke the 25th Amendment to push Trump out of the White House.
Covid cases are also continuing to rise in the United States and abroad. The United States records at least 248,650 new cases of Covid-19 and at least 3,223 virus-related deaths each day, based on a seven-day average calculated by CNBC using data from Johns Hopkins University.
Still, many say the United States is poised to return to growth later this year.
“By 2021, the U.S. economy should experience strong tailwinds stemming from additional fiscal and monetary stimulus, along with the end of the pandemic’s impact on the economy,” said Brent Schutte, strategist of Northwestern Mutual Wealth Management Chief Investments. “The accumulated demand in the industries affected by COVID-19 … and the necessary reconstruction of the inventory should encourage employment growth,” he added.
Taken together, Schutte said this creates the ground for above-average economic growth and sees stocks rise to new highs.
– CNBC’s Jacob Pramuk contributed the information.
Subscribe to CNBC PRO for exclusive information and analysis and live scheduling of weekdays from around the world.