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Market Snapshot: Dow futures rise 250 points as stock market aims to add to rally as Fed week kicks off

Market Snapshot

The Nasdaq finished Friday’s trade less than 4 points from an all-time closing record but is under pressure on Monday


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U.S. stock-market futures on Monday rose as Wall Street equities looked to add to a rally that saw the Nasdaq Composite notch fresh records last week on the back of improving economic data in the face of a viral outbreak.

How are benchmarks faring?

Futures for the Dow Jones Industrial Average
YMM20,
0.98%

YM00,
0.98%

were rising 256 points, or 0.9%, at 27,321, those for the S&P 500 index
ESM20,
0.59%

ES00,
0.59%

were rising 21.70 points, or 0.6%, at 3,208.50, while Nasdaq-100 futures
NQM20,
0.03%

NQ00,
0.03%

were trading down 12.50 points, or 0.1%, to trade at 9,821.

On Friday, the Nasdaq Composite Index
COMP,
-0.10%

set a record intraday high at 9,842.49 before pulling back to end 3.1 points shy of its Feb. 19 record closing high. The Nasdaq-100
NDX,
-0.42%
,
meanwhile, rose 194.73 points, or 2% to 9,824.39, marking a record finish.

For the week, the Dow
DJIA,
0.92%

finished 6.8% higher, the S&P 500
SPX,
0.36%

gained 4.9%, while the Nasdaq advanced 3.3% and the Nasdaq-100 rose 2.8%.

What’s driving the market?

The Federal Reserve is set to release its updated policy statement on Wednesday and its first set of economic projections since December. Although investors aren’t expecting the central bank to dial back rates, which currently stand at a range of 0% and 0.25%, investors may be eager to garner clues from policy makers after Friday’s jobs report produced a stunning 2.5 million increase in payrolls in May, when economists had expected as many as 9 million jobs lost in the month, amid coronavirus-related closures.

Read:Fed will be encouraged by the May job-market surprise but unlikely to rip up its low-rates-for-longer script

“Following a massive upside surprise from the May employment report, the focus will shift to the Fed’s interpretation of the latest data and potential implications for monetary policy when the FOMC convenes this Wednesday,” wrote analysts at Deutsche Bank, led by Brett Ryan, senior U.S. economist, in a research note dated June 5.

“We expect the June meeting to mark a first step away from a focus on crisis prevention toward more traditional goals of providing accommodation to support the recovery,” the researchers wrote.

Friday data showed that the U.S. May unemployment rate fell to 13.3%from 14.7%. Economists polled by MarketWatch had predicted the loss of 7.25 million jobs and a May unemployment rate of 19%.

Markets have been kept afloat and have even made significant traction higher, despite civil unrest and evidence of rising Sino-American trade tensions, on the back of trillions of dollars in support from the U.S. government and the Fed, whose balance sheet has ballooned to $7.21 trillion from around $4 trillion in March.

Investors have also been heartened by efforts to reopen the U.S. economy in the aftermath of pandemic-related closures. Reopening plans are in various stages in all 50 U.S. states. New York City, one of the regions hardest hit by coronavirus, was set to launch Monday the first phase of its reopening, which includes the restart of construction and limited retail operations.

Still, the Wall Street Journal reported that some states, California, Utah, Arizona, North Carolina, Florida, Arkansas and Texas, among others, are reporting an increase in the number of infections after having lifted restriction, even as the overall case tally is sliding in the U.S., citing data compiled by Johns Hopkins University.

As of early Monday, there were more than 7 million confirmed cases of the deadly infection globally, with 1.9 million infected in the U.S., according to the data.

Which stocks were in focus?
  • PG&E Corp.
    PCG,
    1.95%

    Shares of  
    sank in premarket trading Monday, after the San Francisco-based utility announced an equity investment of a total of $3.25 billion by investors including Appaloosa, Third Point LLC, Fidelity Management & Research Co. LLC and Zimmer Partners at a discount to current prices.

  • Shares of Gilead Sciences Inc.
    GILD,
    1.29%

    rose in premarket trading Monday, after Bloomberg reported over the weekend that U.K. drugmaker AstraZeneca PLC
    AZN,
    -2.89%

    made a preliminary approach regarding a potential merger, although the report said the companies weren’t in formal talks and Gilead was not currently interested in selling or merging.

  • Shares of oil companies were bolstered as U.S. crude prices neared $40 a barrel. Marathon Oil Corp.
    MAR,
    4.15%

    was up more than 18% before the opening bell, along with a 17.4% gain in Noble Energy Inc.
    NBL,
    11.27%
  • Shares of Dow component Boeing Co.
    BA,
    10.41%

    surged 8.8% in off-hours amid optimism around the re-openings. The most beaten-down industries have rallied sharply in recent sessions as they come back into favor again.

How are other assets trading?

Oil prices fell
CL.1,
-1.61%

Monday even after OPEC agreed on Saturday to extend a pact to ease global output. West Texas Intermediate Crude was trading 53 cents, or 1.3%, lower at $39.03 a barrel on the New York Mercantile Exchange.

In precious metals, August gold
GCM20,
0.68%

on Comex was up $11.90, or 0.7%, at $1,694.90 an ounce, after finishing Friday trade at its lowest level since April 3.

The 10-year Treasury note yield
TMUBMUSD10Y,
0.898%

was little changed at 0.900%, following Friday’s surprising jobs report. Bond prices move in the opposite direction of yields.

The greenback edged higher against its major rivals, but was mostly flat, as gauged by the ICE U.S. Dollar index
DXY,
-0.18%
.

In global equities, the Stoxx Europe 600 index
SXXP,
-0.04%

traded down 0.1%, while the FTSE 100 index
UKX,
0.32%

rose 0.1%.

In Asia, Japan’s Nikkei
NIK,
1.37%

closed 1,4% higher, the China CSI 300
000300,
0.51%

finished 0.5% higher and Hong Kong’s Hang Seng Index
HSI,
0.02%

finished flat but in positive territory. South Korea’s Kospi index
180721,
0.11%

gained 0.1%.

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