Stock futures rose slightly in early morning trading on Tuesday after worries about a slowdown in growth sparked a sell-off on Wall Street on Monday.
Futures on the Dow Jones Industrial Average gained 97 points. S&P 500 futures and Nasdaq 100 futures both rose slightly.
The spread of the delta coronavirus variant continued to keep investors nervous. The seven-day average of daily coronavirus cases in the US hit 72,790 on Friday, beating its peak last summer when the nation did not have an approved Covid-19 vaccine, according to data compiled by the Centers for Disease Control and Prevention .
“The Delta variant of the virus is now spreading rapidly in the US and a modest decline in activity cannot be ruled out,” Solita Marcelli, CIO Americas at UBS, said in a press release. “But any possible slowdown should be dampened a bit.”
Traders on the floor of the New York Stock Exchange
Source: NYSE
Concerns about a slowdown in growth caused US Treasury yields to decline on Monday. The yield on the ten-year benchmark government bond even fell by 8 basis points to 1.15%. Monday’s bond yield decline followed data showing that the US manufacturing sector expanded more slowly than it did a month ago.
A late-day sell-off in cyclical stocks like materials and industrials eventually pushed the Dow and S&P 500 into the red. The blue chip Dow rose 250 points to hit an all-time high once but ended almost 100 points lower on Monday.
Investors are closely monitoring progress in Washington as lawmakers work towards a bipartisan infrastructure bill that would provide $ 550 billion for U.S. infrastructure. Senate majority leader Chuck Schumer wants to get the 2,702-page bill through the Chamber before a planned one-month break from August 9th.
Meanwhile, the second quarter reporting season continues, with Under Armor, Lyft, Eli Lilly and Amgen among the companies that will report on Tuesday.
So far, 88% of the S&P 500 companies have reported a positive earnings surprise for the second quarter, the highest percentage since FactSet began collecting this metric in 2008.
“Rising earnings support valuation,” said Terry Sandven, chief equity strategist at US bank Wealth Management, in a press release. “Rising revenues and profits, generally subdued inflation, relatively low interest rates, ongoing monetary and fiscal stimulus and the medical advancement of COVID-19 support our outlook for rising US stocks in the second half of 2021.”
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