Stock futures opened lower Sunday evening, pausing after last week’s rally, as a growing number of countries and U.S. states planned or began the process of phasing out stay-in-place measures.

The three major domestic equity indices tore higher last week even as new corporate earnings results and economic data reports revealed more evidence of the devastation caused by the coronavirus pandemic.

Friday’s jobs report from the U.S. Department of Labor showed employers cut a record 20.5 million payrolls in April, erasing a decade worth of jobs gains within that month alone. The unemployment rate hit 14.7%, jumping in just two months from February’s 50-year low to an all-time high, based on Bureau of Labor Statistics data back to 1948. U.S. Treasury Secretary Steven Mnuchin said in an interview with Fox News Sunday, “The reported numbers are probably going to get worse before they get better.”

But as some analysts noted, the dismal data could serve as impetus for lawmakers to unleash further stimulus to help support Main Street workers and businesses – giving investors hope that such relief measures would eventually offset the economic damage imposed by the pandemic.

“The April employment report shouldn’t have come as a surprise to anyone who had been following the weekly claims data. But nothing galvanizes politicians into action quicker than headlines telling their constituents that the economy is in meltdown, backed by the hard data that everyone understands,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note.

“That’s much more difficult to dodge than mere forecasts,” he added. “Accordingly, we think the key consequence of the jobs report—which, in truth, delivered no real surprises to markets—is that it will push Congress nearer to another substantial stimulus package.”

Celebrity Chef Brandon Fay, owner of the fast-casual takeout restaurant ‘Pasta By Hudson’ delivers pasta to healthcare workers in honor of Mother’s Day amid the coronavirus pandemic on May 10, 2020 in New York City. (Photo by Alexi Rosenfeld/Getty Images)

Other strategists agreed that policymakers’ swift actions to provide fiscal and monetary support have been a key component of stocks’ recent moves higher, especially given the speed and breadth with which these relief measures have come.

“After the market crossed our bear case level of 2,300, our view has consistently been that fiscal and, more importantly, monetary stimulus introduced to counteract the Covid-19 crisis, especially that of injecting liquidity in key financial markets and lowering cost of capital (e.g. interest rates cuts, credit spread compression via various lending facilities and direct payments), will put a floor under equities,” Dubravko Lakos-Bujas, chief U.S. equity strategist at JPMorgan, said in a note.

“More so, we have been arguing that this unprecedented stimulus and liquidity boom will outlast the health crisis,” he added. “Our valuation models imply that the equity risk premia remains attractive, but does vary according to the equity universe—most attractive for Nasdaq, Secular Growth and Sustainable Income stocks over the medium-to-long term.”

The Nasdaq was up 1.7% for the year to date as of market close Friday, outperforming the S&P 500 and Dow, which were down 9.3% and 14.7%, respectively, over the same period.

Still, stocks’ rallies after the recent batch of historically weak economic data and downward revisions to corporate earnings outlooks for this year have led at least some strategists to declare the stock market overvalued.

“In six weeks, as the S&P 500 soared by 30%, investors have raced from despair at the bear market bottom to optimism about the economic re-start,” Goldman Sachs analyst David Kostin said in a note Friday. “A single catalyst may not spark a pullback, but concerns exist that we believe, and our client discussions confirm, investors are dismissing including $103 billion in expected bank loan losses in the next four quarters, lack of buybacks, dividend cuts, and domestic and global political uncertainty.”

6:05 p.m. ET Sunday: Stock futures tick down

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:05 p.m. ET:

  • S&P 500 futures (ES=F): down 11.25 points, or 0.38%, to 2,917.25

  • Dow futures (YM=F): down 73 points, or 0.3%, to 24,213.00

  • Nasdaq futures (NQ=F): down 37 points, or 0.4%, to 9,181.25

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