Futures tracking the S&P 500 hit an all-time high on Tuesday, setting the benchmark index on track to open just about 0.5 per cent below its peak, as investors bet on more federal measures to support the country’s economy.
Ultra-low interest rates, trillions of dollar in stimulus and, more recently, a better-than-feared second-quarter earnings season have fueled a rally in Wall Street’s three main indexes.
The tech-heavy Nasdaq was the first among the three to bounce back from the coronavirus-induced crash in March, boosted by “stay-at-home winners” Amazon.com, Netflix Inc and Apple Inc.
The blue-chip Dow is about 6 per cent below its February peak.
“You’ve got to admit that this is a market that wants to go up, despite tensions between U.S.-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.
“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”
President Vladimir Putin said Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine after less than two months of human testing.
Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans.
The benchmark index is set to open about 12 points below its Feb. 19 record peak of 3,393.52.
At 6:58 a.m. ET, S&P 500 e-minis EScv1 were up 20.25 points, or 0.6 per cent, to 3,373, topping an all-time high of 3,372.25 last hit on Feb. 20.
Dow e-minis 1YMcv1 were up 250 points, or 0.9 per cent, and Nasdaq 100 e-minis NQcv1 were up 51.75 points, or 0.47 per cent.
Among early movers, Royal Caribbean Cruises Ltd advanced 4.4 per cent as it said testing for the coronavirus was very likely going to be a part of new safety measures planned to get its ships to resume sailing after months of being docked.
Peers Norwegian Cruise Line Holdings Ltd and Carnival Corp rose about 6 per cent and 4 per cent, respectively.
No. 1 U.S. mall owner Simon Property Group gained 2.3 per cent despite posting disappointing second-quarter profit as its chief executive expressed some hope over a recovery in retail as lockdown measures in some regions eased.
Airline stocks such as American Airlines Group and United Airlines rose for the second day after the Transportation Security Administration (TSA) on Monday flagged a pickup in the number of air travellers.