US stock futures rose in early trading on Wednesday as markets continued to continue with optimism over economies stemming from coronavirus-led shutdowns.
Dow futures had an opening gain of about 171 points. Dow futures gained 181 points, or 0.7%. Futures for the S&P 500 added 0.5%. Nasdaq 100 futures were higher by 0.4%.
The Nasdaq 100 Index, which tracks the 100 largest Nasdaq Composite non-financial corporations, fell less than 1% on Wednesday from its record high set. 1
The S&P 500 has increased by 1% so far in June, bringing its profit from its pandemic situation in March to more than 40%.
On Tuesday, the shares rose as optimism about business reopening overshadowed concerns about the global pandemic, US-China trade tensions and nationwide protests. Shares received an extra boost during the last trading hour and closed around their sessions.
National protests were largely calm on Monday night.
“Despite several significant issues – national riots, Chinese relations, an ongoing pandemic – the stock market is primarily focused on one thing: restarting US and global economic activities,” Jim Paulsen, head of investment strategy at Leuthold Group, told CNBC.
The Dow Jones industrial average climbed 267 points, or 1.05% on Tuesday. The S&P 500 also recorded a gain and climbed 0.82%.
Stocks linked to the resumption of states outperformed. Citigroup, Wells Fargo and Bank of America all rose by at least 0.9%. Gap climbed 7.7%. Southwest received 2.6%. Shopping malls and mall operators saw strong gains on Tuesday.
Nasdaq Composite was the relative underperformer, gaining 0.6% when investors focused on financial reopening and rotated out of home-home gigs.
“The broader stock market (ie small-cap stocks, cyclical sectors, international stock markets and growth stock markets) is increasingly participating in this rally, which indicates that the recession is ending,” Paulsen added.
Equities have continued their upward trend as risk appetite grows on optimism that the worst of the economic downturn from the spread of coronavirus is in the past. Earnings in June follow monthly increases in April and May for US equities.
Dow is now up more than 41% from its 52-week low on March 23.
Wharton professor Jeremy Siegel said the stock market rally still has to go thanks to massive support from the Federal Reserve.
“I think this rally has to go on. It has all the doubts there, but it’s the liquidity that the Fed assumes I think is the primary decision,” Siegel said on CNBC’s “Closing Bell.”
While stocks have largely eroded the unrest around the country, federal and local governments are acting. Large cities such as New York and Chicago have introduced a curfew in an effort to spread the mass collections. President Donald Trump said Monday night that he will deploy the military if states and cities failed to stop the demonstrations.
On Wednesday, the private sector ADP report will be released at 8:30. Analyzes interviewed by FactSet expect a loss of 8.75 million jobs in May. This comes after wages bleed more than 20 million jobs in April when companies sliced workers in the middle of a coronavirus-induced shutdown that took most of the US economy offline. April marked the worst job loss in the history of ADP reports.
Markit Services PMI and ISM Non-Manufacturing Survey will also come out before 4pm on Wednesday.
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