The calm movement in futures follows a strong start to the week for stocks in Monday’s session, with the Dow Jones rising 410 points, or 1.5%. The S&P 500 and the Nasdaq rose 1.6% and 1.9% respectively.
Monday’s rally allowed the market to break losing streaks. The Dow Jones and the S&P 500 have fallen for four consecutive weeks. The Nasdaq Composite managed to break its own three-week streak with a 1% gain last week.
David Waddell, CEO of wealth strategists firm Waddell & Associates, said he saw recent market weakness as necessary “comeuppance” for major tech stocks and that stocks were pegged for short-term volatility so that the clues were walking in the water.
“I think we are in a lateral period. It’s just that we’re going to do it like we’re on a trampoline, ”Waddell said. The strategist also said his clients still have a large portion of their assets in cash, suggesting potential support for the market.
Political news is expected to potentially be a major driver of market news this week, with the first debate between President Donald Trump and Democratic candidate Joe Biden scheduled for Tuesday evening. Some Wall Street analysts believe the first debate of this cycle could be more important to markets than most debates, with a clear victory by a candidate likely to create significant market moves.
House Speaker Nancy Pelosi said Monday evening Democrats were unveiling a new $ 2.2 trillion stimulus package, smaller than the more than $ 3 trillion proposed earlier in the crisis, but still fine above what the Republican leaders have offered. The new bill would include improved unemployment benefits and assistance to airlines and state and local governments, according to a summary.
The stock rally on Monday came after mixed news about the coronavirus response over the weekend. On the bullish side of the market, Florida lifted restaurant capacity restrictions over the weekend and Pelosi said she believes another relief bill was still on the table.
However, cases in the United States continued to rise once again, with Dr Anthony Fauci saying on Monday that the United States is “not in a good position” as colder weather approaches.
Ahead of the debate, investors will get a close look at the state of the semiconductor industry when Micron releases its fiscal fourth quarter results after Tuesday’s bell. The stock gained 1.2% Monday despite a “negative catalyst watch” from Citi.
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