Stock futures drift higher ahead of Fed meeting

Stock futures kicked off the overnight session slightly higher, edging up slightly as market participants awaited the Federal Reserve’s latest monetary policy decision and commentary Wednesday.

During the regular session Tuesday, the S&P 500 and Dow fell while the Nasdaq Composite rallied to a record closing high and briefly breached the 10,000 level during intraday trading. The big-tech FAANG names rallied, with each of Facebook (FB), Amazon (AMZN), Apple (AAPL) and Microsoft (MSFT) posting record closing highs on Tuesday.

On the other hand, the Dow dropped 300 points, or just over 1%, to end a six-session winning streak by Tuesday’s close. Shares of Boeing (BA) led declines, dropping for the first time in seven sessions after reporting a wave of new aircraft cancellations that outpaced new orders in May.

Shares of cyclical companies that had led the recent equity rally gave back some gains on Tuesday. Airlines including American Airlines (AAL) and United Airlines (UAL) along with leisure stocks Wynn (WYNN) and Norwegian Cruise Lines Holdings (NCLH) sank. Car-rental company Hertz (HTZ) – which had posted a stunning advance of 521% between June 1 and Monday’s close – fell 24% on Tuesday, as investors abruptly halted a rally in the bankrupt company’s stock that had been driven in part by hopes of a quick economic reopening.

Still, reopening remains front and center both for investors and policymakers. New Jersey Governor Phil Murphy said Tuesday he was signing an executive order ending the state’s stay-at-home order. The decision came a day after New York City kicked off its first phase of reopening, joining much of the rest of the state and country in helping drive renewed economic activity as new Covid-19 cases abate. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, told Yahoo Finance that he is working with the White House coronavirus task force to focus on states safely reopening at this point, after previously emphasizing flattening the curve in virus transmission.

Other areas of the market underscored investors’ rising optimism for equities as social distancing measures ease. Namely, very newly public companies performed strongly again on Tuesday, with shares of Tesla-competitor (TSLA) Nikola (NKLA) rising another 8.8% after doubling on Monday, though the stock pared gains in late trading. Shares of Vroom (VRM), the online auto-selling platform, closed out its first day of trading on the Nasdaq Tuesday at more than double their IPO level.

6:03 p.m. ET Tuesday: Stock futures open slightly higher

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:03 p.m. ET:

  • S&P 500 futures (ES=F): 3,206.75, up 1.25 points or 0.04%

  • Dow futures (YM=F): 27,273.00, up 9 points, or 0.03%

  • Nasdaq futures (NQ=F): 9,964.00, up 13 points, or 0.13%

Traders wearing masks work, on the first day of in-person trading since the closure during the outbreak of the coronavirus disease (COVID-19) on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 26, 2020. REUTERS/Brendan McDermid

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