U.S. stock futures bounced early Wednesday as investors digested the recent record rally in equities.
Dow futures indicated an opening gain of nearly 100 points. Futures for the S&P 500 and Nasdaq-100 also edged higher.
On Tuesday, the Dow Jones Industrial Average fell more than 167 points, dragged down by Walgreens, Home Depot and Walmart. The S&P 500 lost 0.5%. Tuesday’s session was the first time in three days the Dow and S&P 500 fell, following their record closes on Monday.
The Nasdaq Composite was the relative outperformer, dipping just 0.2%. Tesla shares popped more than 8% after S&P Dow Jones Indices said that the electric vehicle company will join the S&P 500.
Small-caps continued to outperform on Tuesday with the Russell 2000 gaining 0.37% to close at another record.
“For the most part, the economy has been recovering faster than many expected, as consumer spending has held up quite well throughout the crisis. Much of this can be seen through consumer spending habits, where the pandemic has caused consumers to shift spending away from service-oriented products and into to more goods-related products,” Charlie Ripley, Senior Investment Strategist for Allianz Investment Management, said in a note.
“While this has been beneficial to the economy overall, it has created a bifurcated recovery, as some sectors of the economy continue to be extremely depressed,” he added.
Stocks are having a strong month on the back of positive news from two U.S. drugmakers about successful Covid-19 vaccines. The Dow is up more than 12% and the S&P 500 is up more than 10% in November. The Nasdaq Composite is up more than 9%, lagging as investors ditch technology shares of cyclical plays.
Equities are rising amid a backdrop of worsening Covid-19 infections in the U.S. The U.S. seven-day average of daily new Covid-19 infections surpassed 150,000 for the first time on Monday, according to a CNBC analysis of Johns Hopkins data. Retail sales came in lower-than-expected for October as millions of Americans lost their unemployment benefits amid the surge in cases.
A slew of retailers report quarterly earnings on Wednesday, with Target, Lowe’s and TJX Companies set to report before the opening bell. Chipmaker Nvidia, Copa Holdings and L Brands report earnings following Wednesday’s session.
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