U.S. stock-index futures saw muted trade early Tuesday, after a rally on Monday pushed the Nasdaq Composite to its first all-time closing high since Feb. 19, and reaffirmed a state of bullishness that has gripped the market in recent weeks as investors react to the pace of the economic recovery from the COVID-19 pandemic.
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How are benchmarks faring?
Futures for the Dow Jones Industrial Average YMM20, +0.18% YM00, +0.18% gained 10 points, or less than 0.1%, at 27,537; those for the S&P 500 index ESM20, +0.02% ES00, +0.02% slipped 5 points, or less than 0.1%, at 3,222.50; while Nasdaq-100 futures NQM20, +0.13% NQM20, +0.13% added less than a point to reach 9,885.25.
On Monday, the Dow DJIA, +1.70% finished within 7% of its Feb. 12 closing peak, while the S&P 500 index SPX, +1.20% ended the session 4.5% from its Feb. 19 record closing high. The Nasdaq COMP, +1.12%, however, gained 110.66 points, or 1.1%, ending at 9,924.74, marking its first all-time closing record in four months.
What’s driving the market?
Newfound faith in the vibrancy of the American economy and stimulus measures have propelled the equity markets to new heights.
“So far, the equity market is telling us the economic recovery will be far more vigorous than consensus expects,” wrote analysts at Fundstrat Global Advisors, founded by Thomas Lee, in a Monday research note.
The Nasdaq’s stunning closing record and the broad-market’s S&P 500 erasure of all of its 2020 losses at the session’s close came even as the National Bureau of Economic Research, considered the official arbiter of domestic recessions, on Monday declared that recession in the U.S. officially took hold in February, ending a 128-month expansion — the longest dating to 1854.
Monday’s rally is an extension of Friday’s surge that came after Labor Department data showed an increase of 2.5 million jobs in May, when experts had expected steep losses, representing arguably the biggest payrolls surprise in history and enlivening stock-market bulls.
“Many money managers have been caught under-invested and they are under tremendous pressure. They have to publish quarterly reports at the end of this month,” wrote independent market analyst Stephen Todd in a Monday research note.
Looking ahead, investors will watch for a report on job openings at 10 a.m. Eastern, along with an update on wholesale trade. A usually lesser-followed report on the confidence of small-businesses, the NFIB Small Business Optimism Index, also will be watched at 6 a.m.