Stock futures opened near the flat line on Monday night on the heels of a mixed session, with cyclical stocks bidding higher as optimism on the firming growth backdrop s ‘is increased.
S&P 500 contracts drifted sideways. Previously, the S&P 500 and Nasdaq had fallen as Treasury yields rose, putting pressure on growth and technology stocks heavily weighted in indexes. The benchmark 10-year bond yield built on last week’s gains to hit 1.5%, hitting its highest level since June.
The Dow Jones extended its winning streak into a fourth straight session. Stocks of components such as Dow Inc. (DOW), JPMorgan Chase (JPM) and Chevron (CVX) led the index higher as oil prices surged. Positive economic data, including a much stronger than expected durable goods report for last month, helped underpin that decision. West Texas intermediate crude oil futures (CL = F) rose for a fifth straight session to exceed $ 75 a barrel, the highest commodity price since July. And Brent crude oil, the international standard, has moved closer to the level of $ 80 per barrel to reach its highest level since 2018.
âReally what you are seeing is that in all asset classes the market [is adopting] a pro-cyclical view, which means better growth going forward, higher inflation, higher bond yields, âTom Essaye, founder of The Sevens Report Research, told Yahoo Finance Live on Monday. âYou see it from commodities to stocks. ”
Investors also continued to monitor developments outside Washington, with lawmakers facing a deadline this week to fund the government by Thursday night to avoid a government shutdown.
The effort to pass a new government budget has been drawn into ongoing debates over whether or not to raise the federal debt ceiling and adopt a sweeping $ 3.5 trillion reconciliation plan, which would push forward. a number of initiatives at the heart of President Joe Biden’s economic agenda.
Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen are also expected to testify before the Senate Banking Committee on Tuesday on the Fed and Treasury responses to the pandemic. In prepared remarks, Yellen addressed the ongoing debt ceiling debate, reiterating his concern about the negative implications for the U.S. economy, if lawmakers do not take action.
“It is imperative that Congress quickly address the debt limit. If it does not, America would default for the first time in history,” Yellen said in the remarks. “The full confidence and credit of the United States would be jeopardized, and our country would likely face a financial crisis and economic recession.”
For investors, the plethora of overlapping debates in Washington could be a short-term source of more market turmoil.
“I think it’s possible the volatility will increase a bit,” Eric Freedman, chief investment officer of US Bank Wealth Management, Yahoo Finance Live told Yahoo Monday.
âNot only are you worried about the debt ceiling and the legislation that might come out, but you also worry about when the Federal Reserve might step in, and you have some income to come as well,â he added. âSo we’re in that interim period for the next couple of days where the only announcements from companies tend to be negative. We’ve had a few over the past week, especially focusing on pressures on the costs.”
6:07 p.m. ET Monday: Stock futures drift sideways
Here are the main movements on the markets as of Monday evening:
S&P 500 Futures Contracts (ES = F): -2.75 points (-0.06%), at 4,430.25
Dow Futures (YM = F): -3 points (-0.01%), at 34,740.00
Nasdaq Futures (NQ = F): -17 points (-0.11%) to 15,177.75
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter