U.S. stock futures jumped on Tuesday as Wall Street looked to bounce back from a rough week. The gains came ahead of President-elect Joe Biden’s inauguration on Wednesday with expectations for another big stimulus and faster pace of vaccine distribution ahead.
Futures contracts tied to the Dow Jones Industrial Average rose 200 points, or 0.7%. S&P 500 futures added 0.8%. Nasdaq 100 futures gained 1%.
The move in futures comes after a slump for equities last week. The Nasdaq Composite and S&P 500 lost 1.5%, while the Dow was off 0.9%, respectively.
Janet Yellen, Biden’s designated nominee for Treasury Secretary and a former chair of the Federal Reserve, will appear before the Senate Finance Committee on Tuesday. Yellen’s prepared remarks call for the federal government to enact a large stimulus to help the economy.
“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” said Yellen in prepared remarks obtained by Reuters. “I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.”
Stocks are “likely poised to resume upside, after ending a healthy consolidation,” wrote Fundstrat’s Tom Lee in a note, citing an increase in the pace of vaccinations and eventual rollover in coronavirus cases.
Stocks that would benefit most from another big stimulus and faster vaccine rollout led the gains in premarket trading. Shares of Norwegian Cruise Line Holdings were up 3%. Boeing was up 2.8% in premarket trading. American Airlines was up 2.5% in early trading.
Some tech shares also rebounded from their losses last week.
The market fell slightly last week even as Biden unveiled his $1.9 trillion plan for economic relief as the country tries to get a handle on the Covid-19 pandemic. Biden is set to be inaugurated on Wednesday, with the National Guard in Washington amid heightened security concerns after a Jan. 6 riot at the U.S. Capitol.
“In the week ahead, global economic data and U.S. earnings reports will be plentiful, but what matters is whether President Elect Biden’s Inauguration on 1/20 occurs peaceably and whether Republicans in the Senate send signals of constructive cooperation or of a 2020 replay,” BTIG chief equity and derivatives strategist Julian Emanuel said in a note to clients on Sunday.
