Inventory futures flat after Wall Avenue rally, Fed in focus
US stock futures were unchanged early Wednesday morning as investors held onto the possibility of new fiscal stimulus ahead of the year-end.
Market participants also watched the Federal Reserve’s comments Wednesday on the future of the US economy.
Dow futures fell just 31 points. S&P 500 futures and Nasdaq 100 futures also traded near the flatline.
On Tuesday, the main average resisted a series of negative sessions lasting several days, with all three indices closing in gains. The Dow Jones Industrial Average rose nearly 340 points, helped by a 5% increase in Apple stock. The S&P 500 climbed 1.3% and lost 4 days.
The Nasdaq Composite ended the day on a new record 1.25% higher. The Russell 2000 Small Cap Index closed on a new record high of 2.4%.
Investors welcomed developments in Washington on a stimulus package to help sick Americans with the economic fallout from the Covid-19 pandemic.
House Speaker Nancy Pelosi invited congressional leaders, including Senate Majority Leader Mitch McConnell, to discuss government funding and the relief package on Tuesday. McConnell later told reporters as they left the Capitol that “significant progress” was being made, according to NBC News.
“I am optimistic that we can reach an agreement soon,” he said, although the details of a possible aid agreement were not set out.
On Monday, a bipartisan group of lawmakers released a proposal for another round of economic relief on Monday evening.
The first plan calls for $ 748 billion in spending on programs that both Republicans and Democrats will enjoy, including federal unemployment benefits and additional loans under the Paycheck Protection program. A second $ 160 billion bill would cover the more controversial areas of corporate liability protection and financial assistance to state and local governments.
“Stimulus remains a key issue in the marketplace as it is the necessary bridge to expansive vaccination,” Lindsey Bell, chief investment strategist at Ally Invest, told clients. “Market participants want a deal sooner rather than later as economic data is expected to slow in the short term. Without a deal, the turmoil could intensify.”
The deadline for the stimulation looms amid some of the darkest days of the pandemic. The US has at least 215,400 new Covid-19 cases and at least 2,300 virus-related deaths every day, based on a seven-day average calculated by CNBC using data from Johns Hopkins University.
The rollout of the Pfizer Covid-19 vaccine continued in the US on Tuesday.
The Federal Reserve will release its policy statement forecast on Wednesday afternoon. While the Fed’s long-term view is expected to improve due to the vaccine, the central bank is expected to sound very cautious at the end of its session.
The bond market could show a volatile reaction based on what the Fed signals about its bond purchase program.
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– CNBC’s Jacob Pramuk contributed to this report.