Stock futures opened mixed Thursday evening on the heels of a record-setting session, with the three major indexes gaining amid hopes that a bipartisan infrastructure deal would help further stoke economic activity.
Contracts on the S&P 500 and Nasdaq hugged the flat line after both indexes set record intraday and closing highs during the regular trading day. Nike (NKE) shares jumped 8% in late trading after posting quarterly sales growth that rebounding across all major regions, while FedEx (FDX) shares sank in late trading after even estimates-topping fiscal fourth-quarter results failed to wow Wall Street.
During Thursday’s regular trading day, the Dow outperformed, adding nearly 1% after President Joe Biden’s announcement that he had reached an infrastructure agreement with a bipartisan group of senators helped catalyze a jump in cyclical shares.
The deal would include about $600 billion in new federal spending on investments for new roads, clean energy and other projects, and cost nearly $1 trillion in total over the next five years. It would be funded via provisions including stronger tax collections enforcements for the wealthy, and wireless spectrum auction and strategic petroleum reserve sales.
“The way we’re thinking about it is, it has the positive side of the deal in terms of the equity market perspective: More spending on physical infrastructure, electric vehicles, 5G and broadband, without the tax increases which would have been a negative from the equity market perspective,” Gabriela Santos, global market strategist at JPMorgan Asset Management, told Yahoo Finance. “This is certainly a positive especially for the more domestic, cyclical-heavy parts of the market, as well as parts of technology like semiconductors, which are more related to the 5G and the green theme.”
In a sign of the ongoing recovery still under way in the U.S., the Labor Department’s weekly jobless claims report out Thursday morning showed a drop in new filings, even as the margin of improvement came in slightly weaker than expected. And on Friday, investors will be closely watching the Bureau of Economic Analysis’ reported on core personal consumption expenditures (PCE), which serves as the Federal Reserve’s preferred inflation gauge. This is expected to have risen by 3.4% in May over last year, marking the fastest increase since 1992.
“We continue to like cyclical sectors, like industrials, financials and energy, and the possibility of a new spending bill is favorable for many of the companies in those sectors,” Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, wrote in an email. “However, the general reoopening of the economy and renewed, post-COVID-19 economic growth is the most likely driver going forward, regardless of whether or not additional proposed legislation becomes law.”
6:12 p.m. ET Thursday: Stock futures trade mixed
Here’s where markets were trading Thursday evening:
S&P 500 futures (ES=F): 4,260.00 +4 points (+0.09%)
Dow futures (YM=F): 33,190.00, +108 points (+0.32%)
Nasdaq futures (NQ=F): 14,352.75, -1.50 points (-0.01%)
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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