Stock futures were little changed Tuesday evening at the start of the overnight session, taking a pause after the S&P 500 closed out at its highest level since March 5.
Earlier, stocks pared some gains in the final 30 minutes of trading during the regular session Tuesday, after Bloomberg reported U.S. officials were considering sanctioning Chinese officials and entities over a new national security law that would impose on the autonomy of Hong Kong, a region which has special trade status with the U.S.
Still, the threat of heightened tensions with China did little to knock stocks off their upward trajectory during the session. The Dow closed out the session up more than 500 points, or nearly 2.2%.
Tuesday’s rally was led by the Financials sector in the S&P 500, and big banks including Goldman Sachs (GS) and JPMorgan Chase (JPM) outperformed in the Dow as longer duration Treasury yields rose faster than those on the shorter end of the curve, with a steeper yield curve benefiting banks. And earlier in the session, JPMorgan CEO Jamie Dimon told CNBC in an interview he felt his company’s stock was “very valuable” at current levels, or still off more than 30% from its recent high from January this year.
Airline, travel and leisure stocks also posted sharp advances during Tuesday’s session as new data on air travel showed an uptick in the number of travelers moving through TSA checkpoints over the holiday weekend, and more states moved to reopen businesses without causing an influx in coronavirus cases.
Plus, more positive economic data showing stabilizations in consumer confidence and an unexpected rise in new home sales in April also contributed to equities’ rally. The Census Bureau’s new home sales data provided an upbeat glimpse of economic activity trends in areas that had begun to reopen their economies: New home sales in the South and Midwest – regions where lockdowns have eased more quickly – rose over last year by 4.7%, and 26.5%, respectively, while sales in the Northeast and West – where stay-in-place orders have held up more firmly – were still down a respective 26.5% and 33.5%.
“That would imply room for some improvement as these regions ‘open-up,” Neil Dutta, head of economics for Renaissance Macroeconomics, said in a note.
Some analysts have struck a more cautious tone on the direction of the stock market in the very near-term, however, even as conditions improve off last month’s lows.
“While I do think we’re going to 30,000 [on the Dow] next year, and 40,000 by 2023, I don’t think this is the beginning of the run to new highs, right here,” Paul Schatz, president of Heritage Capital told Yahoo Finance’s On the Move. “I think we need some pause and digestion first.”
6:05 p.m. ET Tuesday: Stock futures open little changed
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): 2,992.25, down 2.25 points (-0.08%)
Dow futures (YM=F): 24,993.00, down 9 points (-0.04%)
Nasdaq futures (NQ=F): 9,407.25, up 0.75 points (+0.01%)
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