Stock Futures Rise on Vaccine, Stimulus Hopes
By Will Horner
U.S. stock futures rose Wednesday on optimism that the rollout
of Covid-19 vaccines and progress toward a deal on a new
fiscal-stimulus bill augur well for the economic rebound.
Futures tied to the S&P 500 climbed 0.5% while Dow Jones
Industrial Average futures gained 0.6%, suggesting that both
benchmarks will advance after the New York opening bell. Contracts
on the Nasdaq-100 Index gained 0.6%, pointing to gains for
technology stocks a day after investors pulled funds from the
sector, sending broader gauges down.
Stocks have been jittery in recent days, with the major indexes
wavering daily between losses and gains. On Wednesday, sentiment
was buoyed by signals that Democrats will seek to bridge
differences over jobless benefits and other issues as they aim to
complete a $1.9 trillion relief package in coming days. Mr. Biden
also said the U.S. would have enough Covid-19 vaccines for all
American adults by the end of May, two months earlier than he had
"The vaccine rollout is going extremely well compared to many
expectations," said Seema Shah, chief strategist at Principal
Global Investors. "And at a time when it looks like the economy
could recover on its own, we also have the prospect of fiscal
stimulus in the background, and it is leading many people to
upgrade their U.S. growth expectations."
Optimism about the better economic prospects is particularly
fueling demand for shares in companies that would benefit when the
economy returns to normal, said Chris Dyer, director of global
equities at Eaton Vance. That includes banking and energy stocks,
which are outperforming the technology sector this year.
"We can see light at the end of the tunnel of the pandemic," Mr.
Dyer said. "The progress that has been made on vaccinations has led
to confidence in the economic recovery and you have seen companies
geared into that economic recovery do well in the last months."
The bond market has also calmed in recent days after a surge in
yields rattled investors, leading to sharp declines in stocks. The
yield on the 10-year U.S. Treasury bond ticked up to 1.446%, from
1.413% on Tuesday. That is still down from the 1.513% it hit last
Top central bank officials have said the rise in yields reflect
optimism about economic prospects. Federal Reserve Gov. Lael
Brainard said Tuesday that the recent tumult in the bond market is
on her radar screen. She signaled that the Federal Reserve won't
dial back support for the economy until it is on a stronger
footing, reiterating comments made by other officials.
"The Fed has indicated very strongly that they are willing to be
patient, but also [that] the rising yields are an indication of
strong growth, so that is a good environment for equities to be
in," Mrs. Shah said.
Ahead of the market opening, Lyft rose over 3% after the
ride-sharing company disclosed strong February ride figures late
Tuesday. Competitor Uber also rose over 3%.
Investors are awaiting data on activity in the services sector
from the Institute for Supply Management, due at 10 a.m. ET. The
figures are expected to show that sectorwide activity expanded for
a ninth consecutive month in February.
The Fed's beige book report, due at 2 p.m. ET, will offer the
latest collection of business anecdotes, offering insights into how
companies are gearing up for the reopening of the economy.
In commodity markets, Brent crude, the international benchmark
for oil, rose 1.9% to $63.90 a barrel. Gold prices fell 0.6%.
Overseas, the pan-continental Stoxx Europe 600 rose 0.4%.
Most major Asian indexes gained by the close of trading. China's
Shanghai Composite Index rose almost 2%, while in Hong Kong, the
Hang Seng jumped 2.7%. Japan's Nikkei 225 edged up 0.5%, and South
Korea's Kospi rose 1.3%.
Write to Will Horner at William.Horner@wsj.com
(END) Dow Jones Newswires
March 03, 2021 07:31 ET (12:31 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.