Tourists take a picture with the market bull near the New York Stock Exchange.
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Futures contracts tied to major U.S. stock indexes rose Thursday evening just hours after closing the S&P 500 at a record high and President Joe Biden signed benchmark stimulus legislation.
Dow futures totaled 60 points and suggested a gain of a similar magnitude when regular trading resumed on Friday. The Nasdaq 100 and S&P 500 futures totaled approximately 0.2%.
U.S. stocks rose to all-time highs during Thursday’s regular session as the stock of tech stocks resumed and Biden’s $ 1.9 trillion Covid-19 relief package became law. The S&P 500 jumped 1% and reached a new high close, surpassing its previous February 16 record.
The Dow Jones Industrial Average, the relative lag, finished 188.57 points after meeting more than 300 points before the session to an intraday record.
“While we expect conditions to remain volatile, the latest developments in three of the market’s major engines – stimulus, pandemic news and inflation data – point to a new rise in equity,” wrote Mark Haefele. UBS Global Wealth Management Investment Director.
“The stimulus is substantially greater than expected at the beginning of the year. Its provisions will also likely be of great help to consumption and growth,” he added in reference to the stimulus. “This advantage adds to the existing signs of accumulated demand from American consumers.”
But while the S&P 500 hit a new closing record, the Nasdaq Composite posted the best gain of the day with a 2.5% rise in mid-pivot toward popular tech stocks. Movements that increased this index included 4.7% pop in Tesla and gains of at least 3% in Apple, Facebook, Alphabet and Netflix.
The Nasdaq is coming off a 10% correction it suffered earlier this month and remains 5.48% below its own record it set in February.
A rapid rise in bond yields put pressure on the technology index in early March, as investors turned to cyclical and economically sensitive stocks. Strong interest rate increases may put undue pressure on high-growth technology stocks as they reduce the relative value of future profits.
This trend seemed to be partially reversed on Thursday as bond yields eased; the Nasdaq has risen 3.7% so far this week and outperformed both the S&P 500 and the Dow during the period. The ten-year Treasury yield, which peaked at around 1.6% this month, was last seen just north of 1.53%.
Signs that the U.S. economy could be set for a healthy 2021 were abundant Thursday after Biden signed into law its expected $ 1.9 trillion coronavirus relief package. The plan will send direct payments of up to $ 1,400 to many Americans and will also allocate about $ 20 billion to vaccinations against Covid-19 and $ 350 billion to state, local and tribal government aid.
Biden announced Thursday evening that he would lead states to make all adults eligible for the vaccine before May 1 in his first speech as president.
Investors also encouraged a slightly better-than-expected reading of weekly unemployment claims that showed a decline in the number of first-time unemployment benefit applicants.