U.S. stock futures edged higher Wednesday, suggesting that the major indexes may grind toward new all-time highs after the opening bell, as investors bet on fresh fiscal stimulus spending.
Futures tied to the S&P 500 ticked up 0.1% a day after the benchmark notched its 30th record close for this year. Nasdaq-100 futures slid less than 0.1%, indicating that technology stocks may be subdued after the New York opening bell.
Investors are optimistic Congress will pass another coronavirus relief package to bolster the economic recovery as rising infections prompt restrictions on social and business activity. The Trump administration proposed a $916 billion package on Tuesday after Democrats rejected an effort by Senate Majority Leader Mitch McConnell to narrow the scope of the bill.
“It does look to me like we are inching toward a deal,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management. “The market reaction is highlighting what we’ve heard from central bankers: fiscal stimulus is the best way to support the economy and monetary policy can only do so much.”
Lawmakers appear to be facing pressure to offer aid to those who have been hardest hit by the pandemic as infection levels and hospitalizations rise across the country. The U.S. reported more than 215,000 new cases for Tuesday. Some states have introduced fresh restrictions, triggering concern that the economic recovery could falter in the winter months.
“That deterioration in the medical situation is putting more pressure to get something done,” Mr. Gimber said. “The market is more hopeful, with the election out of the way, that compromise will be easier to find.”
Ahead of the opening bell, shares of
declined over 8% after the cybersecurity firm said it was breached by nation-state hackers. The attack compromised the software tools used to test the defenses of thousands of customers.
In bond markets, the yield on the 10-year U.S. Treasury note ticked up to 0.941%, from 0.913% on Tuesday. Yields rise when bond prices fall.
Overseas, the pan-continental Stoxx Europe 600 rose 0.6%. The British pound gained 0.8% against the dollar and 0.7% against the euro.
Investors are cautiously optimistic that the U.K. and European Union may strike a trade deal soon. British Prime Minister
is scheduled to talk face-to-face with European Commission President
Ursula von der Leyen
over dinner in Brussels.
“There is still optimism about the trade deal,” said
head of foreign-exchange strategy at Rabobank. “The market is assuming, given he’s traveling to Brussels, he is willing to push for a last-minute deal.”
Trading in Asia closed on a mixed note. China’s Shanghai Composite Index fell 1.1%, while South Korea’s Kospi advanced 2% and Japan’s Nikkei 225 rose 1.3%.
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