Dow futures jump 200 points, rebounding from last week’s losses
[CNBC, GETTY IMAGES]
Futures contracts tied to the major U.S. stock indexes rose at the start of the overnight session Sunday evening as investors pored over comments on the state of the American economy from Federal Reserve Chairman Jerome Powell in light of last week’s market losses.
Dow Jones Industrial Average futures climbed 205 points, implying an opening gain of 0.5%. S&P 500 and Nasdaq futures were also slightly higher and pointed to modest advances of 0.5% and 0.3%, respectively, at Monday’s open.
The overnight moves Sunday evening followed a red week on Wall Street. The Nasdaq Composite and S&P 500 fell 1.1% and 2.2%, respectively, last week with the latter notching its worst week since March. The Dow industrials finished the week down 2.65% for its third negative week in four and its worst week since April 3.
Investors on Sunday night heard from Federal Reserve Chairman Jerome Powell, who spoke with CBS’ “60 Minutes” to detail the impact of Covid-19 on the U.S. economy and the path back toward growth.
The central bank leader told the show that he’s “highly confident” the U.S. economy will claw its way back from the current pullback, but warned that it may not fully recover until a Covid-19 vaccine is complete.
“In the long run and even in the medium run, you wouldn’t want to bet against the American economy. The American economy will recover,” Powell told “60 Minutes” in an excerpt aired Sunday morning on “Face the Nation.”
“Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of the year,” the Fed chief added. Still, Powell cautioned that “for the economy to fully recover … that may have to await the arrival of a vaccine.”
Wall Street’s veteran investors say stocks could be in for choppy trading until it’s clear that state efforts to reopen their economies aren’t met with significant spikes in new cases of Covid-19.
A flurry of recent economic data, including record-setting unemployment figures and a 16.4% plunge in April retail sales, show just how abruptly state-imposed business closures impacted the broader U.S. economy.
Patrick Leary, chief market strategist at Incapital, told CNBC’s Patti Domm that financial markets are looking a little fatigued between abysmal economic data, recent state-by-state efforts to restart business and worries over renewed animosity between the U.S. and China.
“Market reactions to the data have been somewhat muted,” he said. He said stocks on Friday were reacting negatively to threats from China that U.S. companies could be targeted if the U.S. does not ease up on Huawei.
“The markets right now don’t need another reason to be pessimistic. It seems like both the bond market and stock market are getting a little tired. Both markets are looking for the next catalyst,” he added.
By Thomas Franck@TOMWFRANCK
— CNBC’s Jeff Cox and Patti Domm contributed reporting.