Tuesday May 25th

25-05-2021

The S&P 500 is set to gain a second day as bitcoin stabilizes, Dow futures are up 90 points

U.S. stock index futures were slightly higher in early morning trading on Tuesday following a strong session led by technology shares and reopening plays. Dow futures rose 90 points. Futures on the S&P 500 added 0.3%, pointing to a second day of gains for the major benchmark which has stalled out as of late. Nasdaq 100 futures added 0.5%. Bitcoin’s recent rout, which has hit tech stocks like Tesla and dented overall investor sentiment, stabilized on Monday. The cryptocurrency was back near $38,000 early Tuesday after falling below $32,000 at one point on Sunday. Crypto prices rebounded as Elon Musk said he was having discussions with bitcoin minders regarding sustainability. Tesla, a big holder of bitcoin, was higher by about 1% in premarket trading. Crypto-exchange Coinbase gained 1.7% with the shares also getting a boost from a JPMorgan buy call. Big Tech shares Facebook, Amazon, Apple, Microsoft, Netflix, Nvidia, and Alphabet were all higher in early trading. There were broad gains in premarket trading. Airlines, cruise lines and Boeing were also higher. United Airlines jumped nearly 3% in premarket after the carrier said yields on domestic leisure tickets purchased this month topped 2019 levels amid the reopening. The major averages rose on Monday, led by tech stocks and companies that benefit from a strong reopening from the pandemic as Covid cases drop to their lowest level since June  The Dow Jones Industrial Average rose 186 points, helped by gains in Microsoft, Salesforce and Cisco. The S&P 500 climbed 1%. The Nasdaq Composite was the relative outperformer, jumping 1.4% as Facebook, Amazon, Apple, Netflix and Google-parent Alphabet posted gains. The small-cap benchmark Russell 2000 climbed 0.5%. Monday “was driven by inflation anxiety relief,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “Evidence that inflation fears were calming in the bond and commodity markets began to drive the stock market late last week and has continued into today.” “Growth stocks including technology have regained leadership as yield and inflation fears ease,” Paulsen added. After Monday’s gain, the S&P 500 is now in the green for the month of May. The S&P 500 is down only about 1% from its record hit earlier this month before a pullback. AutoZone, Nordstrom, Toll Brothers, Agilent, Intuit and Urban Outfitters report quarterly earnings on Tuesday. Shares in Asia-Pacific rose on Tuesday, as investors watched tech shares following overnight gains in the sector stateside. Mainland Chinese stocks led gains regionally, with the Shanghai composite rising 2.4% on the day to 3,581.34 while the Shenzhen component advanced 2.343% to 14,846.45. In Hong Kong, the Hang Seng index jumped 1.75% to close at 28,910.86. Taiwan’s Taiex also saw robust gains, rising 1.58% to close at 16,595.67. In Japan, the Nikkei 225 rose 0.67% to close at 28,553.98 while the Topix index also advanced 0.34% to end the trading day at 1,919.52. South Korea’s Kospi climbed 0.86% to close at 3,171.32. Oil prices steadied on Tuesday, but were near one-week highs after jumping more than 3% the previous session as investors tempered expectations of an early return of oil exporter Iran to international crude markets. Brent crude futures were up 5 cents at $68.50 per barrel, having jumped 3% on Monday. U.S. West Texas Intermediate futures were 8 cents lower at $65.97 per barrel, after gaining 3.9% the previous session. Gold steadied near its highest in more than four months on Tuesday, buoyed by a weaker dollar but with gains capped after U.S. Federal Reserve officials soothed fears about inflation. Spot gold had risen 0.12% to $1,883.36 per ounce by 0930 GMT, not far from its highest in 4-1/2 months hit on Wednesday. U.S. gold futures were little changed at $1,884.30.