The US stock index changed slightly in overnight trading on Tuesday, after a session that saw stocks alternate between gains and losses.
Dow Jones industrial average futures fell 20 points. The S&P 500 futures and Nasdaq 100 futures each fell 0.09%.
Closed stocks changed slightly on Tuesday as traders digested higher rates, possible additional stimulus measures and political unrest.
The Dow Jones industrial average rose 60 points, or 0.2%, to 31,068.69. Nasdaq Composite closed the day up 0.3%, and the S&P 500 rose slightly to 3,801.19. Meanwhile, the benchmark 10-year Treasury yield traded short at 1.18%, the highest level since March.
Given the growth, Credit Suisse recommended that investors favor the pro-cyclical sectors, including the financial and energy sectors. However, rising rates could affect rising stocks, and a number of technology weights, including Facebook and Apple, fell during Tuesday’s session.
Expectations for an additional fiscal stimulus are one of the reasons behind the steady increase in yields. President-elect Joe Biden is expected to reveal details of his economic plan on Thursday.
“At least even a $ 500 billion fiscal package, which includes additional stimulus controls, extended unemployment benefits and funding for health care and vaccine payments, will be another impetus for economic growth in 2021,” said Jason. Draho, head of UBS Global Wealth Management in America asset allocation.
After Tuesday’s session off, major averages remain lower for the week following Monday’s slide. The Nasdaq Composite is relatively poorly performing, down about 1% in the last two sessions. In small capital letters, however, they are a bright spot, and Russell 2000 has risen 1.7% so far this week.
The movements take place as the unrest in Washington continues. The Democratic-backed House will vote Tuesday night on a resolution calling on Vice President Mike Pence and the Cabinet to invoke the 25th Amendment to push Trump out of the White House.
Covid cases continue to grow in the US and abroad. The United States has at least 248,650 new cases of Covid-19 and at least 3,223 virus-related deaths each day, based on a seven-day average calculated by CNBC using data from Johns Hopkins University.
However, many say the US is ready to return to growth later this year.
“In 2021, the US economy should experience strong winds from additional fiscal and monetary stimulus, along with the end of the pandemic’s impact on the economy,” said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. “Growth demand in industries affected by COVID-19 … and a necessary inventory reconstruction should further stimulate job growth,” he added.
Taken together, Schutte said this sets the stage for above-average growth and sees stocks rise to new highs.
– CNBC’s Jacob Pramuk contributed to the reporting.
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