The Dow futures rose in overnight trading on Monday, pulling the index on track to extend its rally from the regular session.
Dow futures rose 180 points. S&P 500 futures gained 0.6% and Nasdaq 100 futures rose 0.8%.
On Monday, the Dow Jones Industrial Average rose more than 300 points on investor optimism about the economic comeback of the pandemic. At its session high, the average of 30 stocks rose 650 points to hit an intraday record.
The upturn was fueled in part by the Senate’s passage on Saturday of a $ 1.9 trillion economic relief and stimulus bill that is slated to include another round of economic reviews. Banks, airlines, cruise lines and retailers rebounded in hopes of a strong economic recovery.
In addition, the Centers for Disease Control and Prevention announced on Monday that people who have been fully vaccinated against Covid-19 can safely meet indoors without masks. The announcement came after the US hit 3 million vaccinations over the weekend.
Technology stocks continued their recent weakness as the Nasdaq Composite fell 2.4%. The tech-heavy benchmark closed more than 10% below its February 12 closing high and fell into correction territory.
The S&P 500 also ended the day around 0.5%, which was hurt by stocks in Tesla, PayPal, Etsy, and Advanced Micro Devices.
The high-growth names have recently come under pressure from rising interest rates. The yield on 10-year US Treasuries was around 1.6% on Monday. However, hedge fund manager David Tepper said the recent sharp rise in interest rates is likely over and it is difficult to value stocks bearishly right now.
“Monday’s first rally was largely driven by news over the weekend that President Biden’s aid package had passed,” Jim Paulsen, chief investment strategist at Leuthold Group, told CNBC. “Ultimately, however, stock investors are obsessed with bond yields right now, keeping the Nasdaq and S&P 500 tech sectors under pressure all day. Tech stocks intensified until the end.”
“Even so, most of the equity markets had a fine day as small cap stocks and several reopening sectors posted healthy gains,” added Paulsen.
The small-cap benchmark Russell 2000 gained around 0.5% on Monday.