U.S. stock index futures were unchanged during overnight trading Tuesday after the Dow and S&P 500 closed at record highs after the Senate passed the $ 1 trillion infrastructure bill.
Futures contracts linked to the Dow Jones Industrial Average were slightly higher. S&P 500 futures and Nasdaq 100 futures remained unchanged.
During regular trading, the Dow rose 162.82 points, or 0.46%, while the S&P 500 rose 0.1%. Both hit intraday all-time highs and closed records at the same time. The Nasdaq Composite was down 0.49%, posting its second negative trade in the last three. The decline came as government bond yields rose and weighed on growth-oriented areas of the market.
The Senate passed the Infrastructure Bill on Tuesday, which provides for $ 550 billion in new spending on areas such as transportation and the power grid. The bill now goes to the House of Representatives, despite spokeswoman Nancy Pelosi, D-California, announcing she won’t bring it up until the Senate also passes a budget proposal.
Cyclical areas of the market got a boom during trading, aided by both the passage of the bill and the rise in interest rates. The energy, basic materials, industrial and financial sectors all gained more than 1%.
The march to record highs for stocks comes despite rising Covid cases in the US and around the world.
“The widespread distribution of vaccines and distancing measures have helped limit the impact of the variant, but we could still hold back economic growth as some restrictions are reintroduced and consumers may become more cautious,” said Barry Gilbert, asset allocation strategist at LPL Financial. “While we can see an increase in market volatility due to the delta variant, we believe the S&P 500 will continue to make gains through the year end,” he added.
At the forefront of economic data, the consumer price index for July will be released on Wednesday. Economists polled by Dow Jones believe the index rose 0.5% or 5.3% year over year in the last month. In June prices rose 0.9%, the largest monthly increase since August 2008.
The winning season continues on Wednesday, with Wendy’s and Canada Goose among the names to report before the opening bell. Lordstown Motors, eBay and Bumble are on deck after hours.
As of Friday, 87% of the S&P 500 companies that released quarterly results had beat earnings estimates. The same percentage of companies beat sales estimates over this period.
“There has been a lot to consider in the past few weeks: big earnings, a restrictive Fed and some mind boggling economic data,” said Craig Erlam, senior market analyst at Oanda. “Everything it seems now indicates that the Fed will be scaling back its bond purchases in the coming months, with Delta being the only things that could possibly stand in its way if they spread to the US (and many other countries) . “
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