US Futures Mildly Lower After Stocks Surged to Record Highs

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Principal Points

• Stocks on both sides of the Atlantic rally to record highs on Friday
• US futures moderately lower, Bitcoin surges as much as 16% in early trading Monday

Futures contracts tied to the main US indexes on Monday are painting a rather flat to negative open when the opening bell in New York goes off to start a vastly important week. Dow futures at one point in overnight trading slipped as much as 200 points. S&P futures and Nasdaq futures were moderately lower by about 0.30% and 0.05%, respectively.

In the previous session, all three stock gauges jumped to record closings, boosted by renewed optimism over the economic recovery. Friday’s rally saw the Dow Jones Industrial Average gain 238.20 points, or 0.68%, to finish at 35,061.55, the first-ever close above 35,000. The S&P500 added 44.31 points, or 1.01%, to 4,411.79. The Nasdaq Composite gained 1.04%, or 152.39 points, to 14,836.99.

The new heights for the major averages on Friday arrived after a tumultuous start of trading last week. Traders and investors on Monday re-enacted their fears that the Delta strain could hamper the global economic expansion. A strong selling wave led to major losses across indexes on both sides of the Atlantic.

As the week progressed, however, market participants shrugged off virus woes and jumped back into equities, supported by strong financial figures for the second quarter of the year.

Moreover, more than a third of the S&P500 companies are slated to report corporate earnings this week. Quarterly figures are expected from the biggest tech companies, including Tesla, Amazon, Apple, Facebook, Google-parent Alphabet.

Cryptocurrencies Go Higher

To heat the trading activity this week, the Federal Reserve will release its policy statement Wednesday. The US central bank is facing increased pressure by the market over when it should begin dialling down its easy-money approach. At a press conference on Wednesday, Fed Chair Jay Powell is expected to provide details over Fed’s outlook toward the economy, higher inflation pressures, and continued monetary policy stimulus.

In Washington, President Joe Biden has backed a bipartisan deal on infrastructure that is expected to land for voting for a second time this week after it was rejected last Tuesday. Still, both Democrats and Republicans in the Senate believe a deal is possible and expect soon to have the $1tn bill passed and moved further.

Meanwhile, European markets on Monday kickstarted trading relatively muted and to the downside. Major European bourses ended last week with stocks at all-time highs, buoyed by strong corporate earnings and the European Central Bank’s pledge to maintain the current pace of bond purchases.

Friday’s solid buying momentum lifted the broad-based Stoxx 600 Europe to a record high of 461.51 points, having added 1.09% on the day. Automotive shares led the gains, accelerating 2.6% as all major markets across the continent closed in positive territory.

Bitcoin and cryptocurrencies surged over the weekend and extended their rally into Monday’s early trading hours. Market sentiment has brightened up and prospects for recovery now look more probable compared to just a week ago when major digital currencies were in steep declines.

On Monday, bitcoin is trading higher by over 10% on the day, with a session high of $39,700, a 16% single-day rally. Since Wednesday, the crypto token has been in a solid uptrend and is currently trading in its sixth straight day of gains, up 30% for the period.