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On Monday, futures for the Dow and the S& P 500 indexes moved up as investors shifted their emphasis to economically sensitive industries, with attention focused on incoming economic data and continued talks about additional government spending.
In premarket activity, oil majors Exxon Mobil (NYSE: XOM) and Chevron Corp (NYSE: CVX) jumped 1.5 percent and 1.2 percent, respectively, tracking crude prices, while big banks JPMorgan (NYSE: JPM), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), and Bank of America Corp (NYSE: BAC) gained approximately 0.8 percent. [O/R] 3M Co and Caterpillar Inc (NYSE:CAT), both of which benefit the most from a recovery in the economy, also climbed.
Following the Federal Reserve’s announcement last week that it could begin unwinding its bond-buying programme as soon as November and may raise interest rates in 2022, investors shifted their focus away from tech-heavy growth names and toward value and cyclical equities. Despite the fact that monetary tightening is often viewed as a negative for stocks, some investors perceive the Fed’s stance as a vote of confidence in the US economy.
The S& P 500 Value index is down 1.4 percent so far this month, but it is still beating the S& P 500 Growth index. On Friday, Wall Street completed a tumultuous week with modest gains, while the benchmark S& P 500 index was on course to snap its seven-month winning streak due to concerns about increasing corporate taxes and China Evergrande’s default. Investors will now be looking for a slew of economic measures this week, including durable goods orders and the ISM manufacturing index, as well as bipartisan talks on raising the $28.4 trillion debt ceiling. The United States Congress has until September 30 to avoid the second partial government shutdown in three years, and a vote on the $1 trillion bipartisan infrastructure measure is set for Thursday.
The Dow e-minis were up 88 points, or 0.25 percent, at 6:38 a.m. ET, while the S& P 500 e-minis were up 1.5 points, or 0.03 percent, and the Nasdaq 100 e-minis were down 47 points, or 0.31 percent. Alphabet (NASDAQ: GOOGL), Microsoft Corp (NASDAQ: MSFT), Amazon.com Inc (NASDAQ: AMZN), Facebook Inc (NASDAQ: FB), and Apple Inc (NASDAQ: AAPL) were among the mega-cap growth stocks that dipped between 0.3 and 0.4 percent.