Tuesday August 25th


Stock futures rise after the S&P 500′s first close above 3,400, Dow set to gain 150 points

U.S. stock index futures rose early Tuesday morning after another record-setting session on Wall Street. Dow Jones Industrial Average futures traded up 180 points, or 0.6%. The move implied a positive open of around 160 points. Traders were also evaluating a major shake-up to the 124-year-old blue chip benchmark. S&P 500 futures added 0.4%. Nasdaq 100 futures were flat. During regular trading, the S&P 500 climbed 1% and closed above 3,400 for the first time. Apple also hit an all-time high, leading other tech names higher, while airline and cruise operator stocks jumped amid enthusiasm on the coronavirus front. “Equity investors continue to express cautious optimism on the direction of the economy and progress with the virus,” said Mark Hackett, chief of investment research at Nationwide. “Investor sentiment has shifted, with substantial optimism now embedded into the equity markets, driving valuations to the highest level since the technology bubble.” That optimism comes as the number of newly confirmed coronavirus infections in the U.S. has dropped. Data compiled by Johns Hopkins University showed new cases fell to under 37,000 and have been below 50,000 since mid-August. Meanwhile, the Food and Drug Administration approved the use of convalescent plasma as a treatment for coronavirus patients. The Trump administration is also reportedly considering fast-tracking an experimental vaccine from the U.K. Aneta Markowska, chief economist at Jefferies, said high-frequency data on the coronavirus shows economic activity in the U.S. is picking up towards the end of August. “The reopening of schools is proving to be a positive catalyst, with back-to-school shopping on track to exceed last years’ levels. We also show early/tentative evidence of improving labor market trends in states where schools reopened in early August,” Markowska said in a note. After the bell, S&P Dow Jones Indices said Salesforce.com will replace Exxon Mobil, Amgen will replace Pfizer and Honeywell International will replace Raytheon Technologies in the Dow average. The changes are driven by Apple’s coming stock split, which will reduce the technology weighting in the price-weighted average. Salesforce, Amgen and Honeywell gained in premarket trading while Exxon Mobil, Pfizer and Raytheon declined. Exxon has been a part of the average for nearly 100 years. Traders also looked ahead to key data releases, including the latest figures on consumer confidence and new home sales, which were both set for release on Tuesday. Later this week, the Federal Reserve will hold its annual symposium on monetary policy. Wall Street will look for clues on further stimulus and where the economy is headed out of the event. Stocks in Asia Pacific were mostly higher on Tuesday, while top trade representatives from Washington and Beijing had a call to discuss the implementation of their phase one agreement. South Korea’s stocks led gains among the region’s major markets, with the Kospi rising 1.58% to close at 2,366.73. Stocks in Japan also saw gains on the day, with the Nikkei 225 jumping 1.35% to 23,296.77 while the Topix index advanced 1.13% to 1,625.23. Mainland Chinese stocks, on the other hand, were mixed by their close. The Shanghai composite shed 0.36% to about 3,373.58 while the Shenzhen component was above the flatline at approximately 13,669.41. Hong Kong’s Hang Seng index edged 0.26% lower to close at 25,486.22. Crude oil prices were mixed on Tuesday as traders weighed massive production cuts in the U.S. Gulf Coast from Tropical Storms Marco and Laura against rising coronavirus cases in Asia and Europe. Brent crude oil futures added 5 cents, or 0.1%, to $45.18 a barrel by 0055 GMT, while U.S. West Texas Intermediate crude was down 9 cents, or 0.2%, at $42.53 a barrel. Gold prices fell on Tuesday as hopes surrounding a COVID-19 vaccine and positive signals on the U.S.-China trade front buoyed risk sentiment and offset support for the metal from a weaker dollar. Spot gold fell 0.5% to $1,922.67 per ounce. U.S. gold futures was down 0.5% to $1,928.90 per ounce.