Traders are working on the floor of the New York Stock Exchange.
NYSE
US futures jumped on Sunday night as a new stimulus package from Washington headed to the final passage this week.
Dow Jones industrial average futures rose 219 points, or 0.7%. Those for the S&P 500 and Nasdaq 100 composite gained 0.5% and 0.6%, respectively.
The term move came after the Senate approved a $ 1.9 trillion economic aid and stimulus bill on Saturday, paving the way for unemployment benefit extensions, another round of stimulus checks and aid for state governments. and local. The Democrat-controlled house is expected to pass the bill later this week. President Joe Biden is expected to sign the law before unemployment benefits expire on March 14.
The new round of government spending could cause waves in the US Treasury market, where the 10-year benchmark yield has risen sharply in recent weeks. The yield rose to 1.62% on Friday after the start of the calendar year below the 1% mark.
The rapid movement of the marked bond also bothered stock investors, contributing to the weakness of high-rated stocks.
Futures contracts related to the 10-year Treasury price decreased by 0.2% on Sunday night at the opening of trading, which implies higher returns.
“10-year returns have finally reached other asset markets. This puts pressure on valuations, especially for the most expensive stocks that have reached blood valuations,” said Mike Wilson, the US chief equity strategist at Morgan Stanley, in a note.
The stock market came out of an afternoon rally on Friday, which took part in a rough week for the impulse name of the flight. The technically strong Nasdaq ended with a weekly loss of 2.1%, while the S&P 500 gained 0.8%. The Dow, which is more dependent on cyclical stocks, rose 1.8%.
Friday’s return does not indicate that the recent market weakness is over, but the divergence between technical and cyclical games shows that the bullish story remains intact, Wilson said of Morgan Stanley.
“The bull market continues to be under the hood, with values and cycles at the forefront. Growth stocks can join the party once the valuation correction and repositioning are complete,” Wilson said.
Economically, investors will take a look at wholesale stock data from January. Several economic measures in recent weeks have shown a sharp recovery, including a better-than-expected February employment report released on Friday.