Dow futures tick higher ahead of Biden stimulus plans

U.S. stock-index futures were trading mostly higher Thursday ahead of a speech by President-elect Joe Biden that’s expected to lay out details of another round of government spending designed to aid the economy’s recovery from the COVID-19 pandemic.

What are major benchmarks doing?
  • Futures on the Dow Jones Industrial Average YM00, +0.25% rose 62 points, or 0.2%, to 31,021.
  • S&P 500 futures ES00, +0.14% were up 1.2 points, or less than 0.1%, at 3,805.
  • Nasdaq-100 futures NQ00, -0.03% fell 34.75 points, or 0.3%, to 12,937.50.

The Dow DJIA, -0.03% fell less than 0.1% Wednesday just ahead of a House vote to impeach President Donald Trump for inciting the Jan. 6 Capitol riot, while the S&P 500 SPX, +0.23% and Nasdaq Composite COMP, +0.43% ended slightly higher.

What’s driving the market?

CNN reported that Biden, who is due to speak in Wilmington, Del., is prepared to outline a spending package that would include more direct payments to American families and significant state and local funding.

Another round of large, direct payments to households could be the trickiest part of the package, said Hussein Sayed, chief market analyst at FXTM, in a note, because most Republicans and some Democrats in the Senate are against “going too big.”

“On the other hand, opting for a small package will disappoint investors and lead to profit-taking in equity markets,” he said. “Finding the right balance will not be easy.”

Investors will also be keeping an eye on bond yields, which ticked higher last week and early this week in a move blamed on worries that another fiscal stimulus package could fuel inflation. That could spell trouble for stocks, as higher yields make higher stock-market valuations tougher to justify. Investors could also fret that a pickup in inflation would see the Federal Reserve ease up on its bond buying program more quickly than expected.

Investors will also pay close attention to a speech by Fed Chairman Jerome Powell at 12:30 p.m. Eastern.

Weekly data on jobless benefit claims is due at 8:30 a.m. ET, which is expected to show first-time claims for benefits rose to 800,000 last week from 787,000.

The December import price index is also due at 8:30 a.m.

Which companies are in focus?
  • BlackRock Inc. BLK, +0.26% shares rose 2% in premarket trade, on track for a seventh consecutive record close, after the asset manager, with $8.7 trillion in assets under management, reported fourth-quarter profit and revenue that beat expectations.
  • Shars of Tesla Inc. TSLA, +0.59% were lower. The National Highway Traffic Safety Administration sent a letter to the electric-vehicle maker seeking a voluntary recall of 158,000 Model X units from the 2016, 2017 and 2018 model years over a possible defect impacting safety functions including rear-view-camera operation.