Dow futures jump 150 points after Senate passes $1.9 trillion Covid relief bill

1 month ago 9

Traders enactment connected the level of the New York Stock Exchange.

NYSE

U.S. banal futures jumped connected Sunday evening arsenic a caller stimulus bundle from Washington headed toward last transition this week.

Futures contracts tied to the Dow Jones Industrial Average jumped 219 points, oregon 0.7%. Those for the S&P 500 and the Nasdaq 100 composite gained 0.5% and 0.6%, respectively.

The determination successful futures came aft the Senate passed a $1.9 trillion economical alleviation and stimulus measure connected Saturday, paving the mode for extensions to unemployment benefits, different circular of stimulus checks and assistance to authorities and section governments. The Democrat-controlled House is expected to walk the measure aboriginal this week. President Joe Biden is expected to motion it into instrumentality earlier unemployment assistance programs expire connected March 14.

The caller circular of authorities spending could origin ripples successful the U.S. Treasury market, wherever the benchmark 10-year output has risen sharply successful caller weeks. The yield roseate arsenic precocious arsenic 1.62% connected Friday aft starting the calendar twelvemonth beneath the 1% mark. It was trading astatine 1.6% connected Sunday night.

The accelerated determination successful the enslaved marked has unnerved equity investors arsenic well, contributing to weakness successful stocks with precocious valuations.

"10-year yields yet caught up to different plus markets. This is putting unit connected valuations, particularly for the astir costly stocks that had reached nosebleed valuations," Mike Wilson, the main U.S. equity strategist astatine Morgan Stanley, said successful a note.

The banal marketplace is coming disconnected an afternoon rally connected Friday that took immoderate of the sting retired of a unsmooth week for high-flying momentum names. The tech-heavy Nasdaq finished with a week-to-date nonaccomplishment of 2.1%, portion the S&P 500 gained 0.8%. The Dow, much reliant connected cyclical stocks, roseate 1.8%.

The Friday turnaround doesn't awesome that the caller weakness for the marketplace is over, but the divergence betwixt tech and cyclical plays shows that the bullish communicative remains intact, Morgan Stanley's Wilson said.

"The bull marketplace continues to beryllium nether the hood, with worth and cyclicals starring the way. Growth stocks tin rejoin the enactment erstwhile the valuation correction and repositioning is finished," Wilson said.

On the economical front, investors volition get a look astatine wholesale inventory information from January connected Monday. Several economical measures successful caller weeks person shown a betterment that is picking up steam, including a better-than-expected February jobs study released connected Friday.

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