U.S. stock index futures were modestly lower in overnight trading on Thursday, after the major averages closed at new highs.
Futures contracts tied to the Dow Jones Industrial Average fell 44 points. S&P 500 futures declined 0.09%, while Nasdaq 100 futures slipped 0.17%.
The major averages were coming off a record-setting session, which saw all three indexes close at new highs. During regular trading hours the Dow advanced 148 points for a gain of 0.49%. The S&P 500 and Nasdaq Composite hit both intraday and record closing highs, gaining 0.58% and 0.84%, respectively.
The leg higher came amid optimism around Covid vaccines, as well as the hope that Washington will soon come to a consensus on additional stimulus measures.
Leaders on Capitol Hill said they are close to an agreement that would provide $900 billion in additional aid. The talks, which have stretched on for months, are up against the wire, with federal funding lapsing at 12:01 a.m. ET on Saturday.
Senate Majority Leader Mitch McConnell, R-Ky., said Thursday that a “bipartisan, bicameral agreement appears to be close at hand.” He noted it was “highly likely” Congress would work through the weekend, and said lawmakers may have to pass a short-term funding measure to buy enough time to approve legislation.
House Speaker Nancy Pelosi, D-Calif., also said Democrats were moving closer to a consensus. “We made some progress this morning” and “are waiting to hear back,” she told reporters on Thursday.
Stocks’ jump higher on Thursday came despite a rise in Covid cases, as well as disappointing economic data. Jobless claims totaled 885,000 last week, hitting their highest level since early September, and coming in above the expected print of 808,000. Meanwhile, data released on Wednesday showed retail sales falling 1.1% in November, larger than the 0.3% decline expected by economists.
“The bad news this week is that the third wave continues to get worse, and the economic damage from the pandemic continues to mount,” said Brad McMillan, chief investment officer at Commonwealth Financial Network. “The good news is that policy is starting to succeed in containing the virus, and the federal government will likely pass a stimulus bill, mitigating both major risk factors.”
McMillan said investors should expect more volatility in the short term amid developments on the stimulus and vaccine front, before the economy returns to growth in 2021. “With vaccines now available and ramping up, we are at the end of the beginning of the pandemic, and markets recognize that,” he added.
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