Stock futures opened slightly lower as the overnight session began Tuesday evening.
The three major indexes ended mixed during the regular session earlier, with the S&P 500 and Dow higher while the Nasdaq sank as tech stocks came under renewed pressure. Energy stocks – the laggards throughout 2020 – jumped on Tuesday as crude oil prices rose above $53 per barrel to a 10-month high. And the 10-year Treasury yield, which had languished below 1% for most of last year, also held near its highest level since March.
With the S&P 500 just 0.6% below its recent all-time closing high, investors have largely looked through the recent political turmoil in Washington, D.C. The House of Representatives is preparing to vote as soon as Wednesday over whether to impeach President Donald Trump for a second time during his presidency for “incitement of insurrection” after last week’s riots at the U.S. Capitol. Any impeachment proceedings, however, could pull focus away from President-elect Joe Biden’s agenda in his first days in office – and importantly for markets, potentially impact the timeline for the passage of another stimulus package, some strategists noted.
“I think Joe Biden deep down in – he might not say this in public – but I think deep down in he’s thinking, do I really need this kind of distraction?” Greg Valliere, AGF Investments chief policy strategist, told Yahoo Finance on Tuesday. “He has to get his entire cabinet confirmed, he wants to move quickly on a stimulus bill, we’ve got COVID, he has regulations he may want to undo. So I think that an impeachment fight would be a huge distraction for Biden.”
Strategists and traders have overwhelmingly assumed that another large stimulus package will come about under the Biden administration and unified Democratic government. These prospects, along with the Federal Reserve’s still very easy accommodative monetary policy posturing, have helped buoy equities even given the ongoing pandemic and slow vaccine roll-out to date. On Tuesday alone, both St. Louis Fed President James Bullard and Boston Fed President Eric Rosengren said in separate public remarks that they believed it was too soon to even begin talking about shrinking the size of the central bank’s asset purchases, which are currently taking place at a $120 billion monthly pace.
“We’re looking at a market that’s never seen this amount of stimulus before, that’s never seen low rates for years on top of fiscal stimulus, on top of $120 billion of QE [quantitative easing], on top of more stimulus,” Tom Essaye, founder Sevens Report Research, told Yahoo Finance on Tuesday. “There is a positive story in stocks and right now that’s pushing markets higher. The problem of course is what if something goes wrong, but that’s not something the market’s interested in right now.”
6:04 p.m. ET Tuesday: Stock futures open slightly lower
Here were the main moves in markets, as of 6:04 p.m. ET Tuesday:
S&P 500 futures (ES=F): 3,791.00, down 3.5 points or 0.09%
Dow futures (YM=F): 30,950.00, down 24 points or 0.08%
Nasdaq futures (NQ=F): 12,875.00, down 15.25 points or 0.12%
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