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Futures Bounce on Stimulus Hopes

U.S. stock index futures bounced on Monday as doctors said President Donald Trump could be discharged from the hospital where he is being treated for COVID-19, while signs of progress with a new fiscal stimulus bill also lifted sentiment.

Sequestered at Walter Reed National Military Medical Center outside Washington since Friday, Trump has released a series of videos in an effort to reassure the public that he is recovering, although his condition remains unclear and outside experts warn that his case may be severe.

Wall Street’s main indexes sold off sharply on Friday after Trump’s announcement that he had contracted the disease added to political uncertainty just a month away from voting in the presidential election.

Feeding the improved tone were comments from House Speaker Nancy Pelosi, who said on Sunday that progress was being made in talks with Treasury Secretary Steven Mnuchin on a new bipartisan package of coronavirus relief measures.

By 6:23 a.m. ET, Dow e-minis were up 151 points, or 0.55%, S&P 500 e-minis were up 18.5 points, or 0.55%, and Nasdaq 100 e-minis were up 107.5 points, or 0.96%.

Doubts about the scale of further fiscal aid and a slowing economic recovery have weighed on the S&P 500 recently, with the benchmark index in September logging its worst month since the coronavirus-driven crash earlier this year.

A Reuters/Ipsos poll on Sunday showed Trump’s rival, Joe Biden, opening his widest lead in a month in the presidential race, with a majority of Americans thinking Trump could have avoided infection if he had taken the virus more seriously.

Investors say a Biden victory, and an accompanying higher capital gains tax, could spark a round of profit-taking in sectors such as technology.

Heavyweight tech-related stocks including Apple Inc, Nvidia Corp, Netflix Inc, Inc and Microsoft Corp were up about a percent in premarket trading after weighing heavily on the Nasdaq on Friday.

Focus later in the day will be on a reading of the services sector, which accounts for more than two-thirds of the U.S. economy, after data last week showed activity in the manufacturing sector slowed unexpectedly in September.

Reporting by Devik Jain and Sagarika Jaisinghani in Bengaluru; editing by Patrick Graham

Source: Reuters

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