Dow futures fall when lawmakers conclude a stimulus contract on the final minute
U.S. Senate Majority Leader Mitch McConnell speaks with fellow Senate Republicans during a press conference on December 15, 2020 at the U.S. Capitol in Washington, DC.
Tom Brenner | AFP | Getty Images
Stock futures were mixed in early morning trading on Monday when Congress managed to close a coronavirus stimulus deal hours before a deadline.
The futures on the Dow Jones Industrial Average indicated an opening decline of around 100 points. S&P 500 futures were trading below the flatline while Nasdaq 100 futures were in slightly positive territory. When it opens on Monday, Tesla will join the S&P 500 with a weight of 1.69% in the index, the fifth largest.
Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer said lawmakers had reached an agreement on a $ 900 billion aid package that would provide direct payments and unemployment aid to struggling Americans. The announcement came after negotiators resolved a key sticking point by withdrawing the Federal Reserve’s emergency lending powers.
Congress passed a one-day spending bill to avoid a government shutdown that would have started at 12:01 a.m. ET on Monday. President Donald Trump signed the measure late Sunday night, according to White House spokesman Judd Deere.
The legislature will vote on the aid and financing law on Monday.
Key averages have risen lately and hit record highs amid optimism about the fresh coronavirus stimulus and the launch of the vaccine. Moderna ships its first batch of vaccine doses after the US Food and Drug Administration received approval for emergency use. In the meantime, Pfizer and BioNTech vaccines are being distributed to health care workers across the country.
“In the eyes of stocks, the unstoppable vaccination process that has just begun is stronger than current trends in cases and locks, and this will prevent the markets from delving too deep into a source of pandemic desperation,” said Adam Crisafulli , Founder of Vital Knowledge, said in a note on Sunday.
“We remind you that the three pillars of the rally are all largely still in place: vaccines, strong corporate earnings and massive momentum,” he added.
With just two weeks of trading left in 2020, the S&P 500 is up 14.8% over the year, while the Dow is up 5.8% with 30 stocks. The Nasdaq Composite gained 42.2% this year as investors preferred high-growth technology companies.
On Friday, the Fed announced that it would allow the country’s major banks to resume share buybacks in the first quarter of 2021, subject to certain rules.
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