U.S. stocks are seen opening higher Tuesday, with the tech sector in particular expected to bounce back sharply after recent losses as vaccination optimism grows.
At 7:05 AM ET (1205 GMT), the Dow Futures contract was up 175 points, or 0.6%, S&P 500 Futures traded 40 points, or 1.1%, higher, and Nasdaq 100 Futures climbed 270 points, or 2.2%.
The Nasdaq Composite has been in the spotlight of late, as rising Treasury yields have spooked investors in the high growth stocks that populate much of this benchmark index. It dropped 2.4% on Monday, closing more than 10% below its Feb. 12 closing high, and falling into correction territory.
However, the yield on the 10-year Treasury note currently trades at 1.53%, below the levels near 1.60% seen on Monday, easing the pressure on these stocks that rely on cheap funding conditions.
Meanwhile, the House of Representatives will have the final vote on President Joe Biden’s $1.9 trillion Covid relief bill on Tuesday after it passed the Senate with some revisions over the weekend. That clears the path for the president to sign it by next week. The Paris-based OECD said earlier that the extra U.S. stimulus will add a full percentage point to world GDP growth this year.
Adding to the positive news, the Centers for Disease Control and Prevention said Monday that people who’ve been fully vaccinated against Covid-19 can meet safely indoors without masks. This announcement came with over 30 million Americans having received both doses of the Moderna and Pfizer/BioNTech vaccines. The New York Post, meanwhile, reported that a new study had found that the Pfizer-BioNTech vaccine is effective against the Brazilian strain of the virus, further easing concerns that new strains could complicate the economy’s reopening.
In the corporate sector, attention is turning towards GameStop once more, after the company tasked Chewy co-founder Ryan Cohen, a major GameStop shareholder and board member, with spearheading the company’s online sales efforts.
GameStop was caught in a volatile tug-of-war last month between retail traders and professional managers who had bet heavily against the stock. Other stocks which have attracted interest in the Reddit chat rooms now include the likes of Discovery and AMC Networks.
Oil prices pushed higher Tuesday, with the focus turning to the release of U.S. crude oil supply data from the American Petroleum Institute, later in the session. Last week saw the largest U.S. crude oil build on record, with stocks increasing by over 21 million barrels a day.
Crude prices had surged Monday, with Brent spiking above $70 a barrel, after an attack on Saudi Arabia’s oil facilities by Yemen-based forces. However, there was limited impact and prices ended the day lower.
U.S. crude futures traded 1% higher at $65.72 a barrel, while the international benchmark Brent contract rose 1.3% to $69.13.
Elsewhere, gold futures rose 1.6% to $1,705.05/oz, while EUR/USD traded 0.5% higher at 1.1902.