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Stock futures rebound after losing day as Dow tries for another run at a record

Stock futures rebound after losing day as Dow tries for another run at a record

03 Aug 2021

Futures on major indexes rebounded on Tuesday a day after worries about slowing economic growth kept investors on edge and knocked stocks lower.

Futures on the Dow Jones Industrial Average gained 154 points, or 0.5%. S&P 500 futures added 0.3% and Nasdaq 100 futures gained 0.1%. The blue-chip Dow climbed 250 points to touch an all-time high at one point on Monday, but ended the session nearly 100 points lower. It closed about 1% from a record Monday.

The 10-year Treasury yield rebounded on Tuesday, easing some of the concerns about slowing economic growth, after falling back to near 5-month lows on Monday.

The spread of the delta coronavirus variant continued to keep investors on edge. The seven-day average of daily coronavirus cases in the U.S. reached 72,790 on Friday, surpassing the peak seen last summer when the nation didn’t have an authorized Covid-19 vaccine, according to data compiled by the Centers for Disease Control and Prevention.

However, on the positive side the U.S. reached the 70% Covid vaccine milestone, according to the CDC.

Stocks that would benefit most from an economic reopening and more widespread vaccination gained in premarket trading Tuesday. Shares of most airlines were higher in premarket trading, along with Carnival Corp.

“The delta variant of the virus is now rapidly spreading in the U.S. and a modest pullback in activity can’t be ruled out,” Solita Marcelli, CIO Americas at UBS, said in a note. “But any potential slowdown should be somewhat muted.”

Traders on the floor of the New York Stock Exchange

Source: NYSE

Tesla was set for more gains on Tuesday following a 3% pop on Monday.

Shares of Simon Property gained in after hours trading Monday after the mall owner said sales bounced back to pre-pandemic levels, up 80% from a year ago. It also reported a relatively high occupancy rate.

Concern about slowing economic growth triggered a drop in Treasury yields on Monday. The yield on the benchmark 10-year Treasury note fell as much as 8 basis points to 1.15%. Monday’s slide in bond yields followed data showing the U.S. manufacturing sector expanded at a slower pace than a month ago.

A late-day sell-off in economically sensitive stocks like materials and industrials eventually pushed the Dow and the S&P 500 into the red.

Investors are closely monitoring progress in Washington as lawmakers move toward a bipartisan infrastructure bill that would devote $550 billion to U.S. infrastructure. Senate Majority Leader Chuck Schumer aims to rush the 2,702-page legislation through the chamber before a planned monthlong recess starting Aug. 9. 

Meanwhile, the second-quarter earnings season continues with Under Armour, Lyft, Eli Lilly and Amgen among the companies to report on Tuesday.

So far, 88% of S&P 500 companies have reported a positive earnings surprise for the second quarter, which will mark the highest percentage since FactSet began tracking this metric in 2008.

“Rising earnings are providing valuation support,” Terry Sandven, U.S. Bank Wealth Management chief equity strategist, said in a note. “Rising revenue and earnings, generally restrained inflation, relatively low interest rates, ongoing monetary and fiscal stimulus policies and COVID-19 medical progress support our outlook for rising U.S. equities in 2021’s second half.”