Stock Futures Climb After Major Indexes Set Series of Records in August

01 Sep 2021 · 3rd Party Analysis

Stock Futures Climb, Major Indexes Set Records | ThorFX

WRITTEN BY ThorFX

In Summary

  • Stock futures climb ahead of the first trading day of September
  • Major US indexes finish the month of August with gains between 1% and 4%

Equity futures on Wall Street rose in pre-market activity on Wednesday following a month of solid gains and record-setting days for all three main stock indexes.

Futures contracts tied to the Dow Jones Industrial Average advanced around 150 points early on Wednesday. S&P500 futures and Nasdaq futures were higher by roughly 0.4%, and 0.3%, respectively, ahead of the first trading day of September.

During regular trading Wednesday, major averages slipped moderately but managed to log significant gains in August. Yesterday’s session ended with losses of about 0.1% for both the Dow Jones and the S&P500. The Nasdaq Composite was relatively flat with a loss of less than 0.1% on the day.

Most of the S&P500’s 11 sectors dipped in negative territory yesterday. Zoom Video Communications shed $58, or 17%, to close the day at $289.50 per share. The company endured its worst single-day performance since November after it released adjusted earnings guidance that arrived lower-than-expected.

The 30-stock Dow Jones added 1.2% over last month’s trading, while the S&P500 rose 2.9% for the month. The tech-heavy Nasdaq Composite rallied about 4% as tech stocks were among the biggest winners in August action.

Stocks across the board have powered through sizeable challenges to sitting near records ahead of Wednesday’s regular session. Over the last month, investors have priced in higher inflation pressures, coupled with rate hike signals from the Federal Reserve along with a possible reduction of asset purchases by the end of the year.

Covid-19 jitters have repeatedly tilted the lofty valuations of equities, affecting mostly those sectors positioned to benefit from the economic reopening, including travel and leisure, oil and gas, and financials.

While risks remain, and investors are careful to reflect them in their portfolios, the backdrop for equities remains positive.

The Delta Variant Threatens Economic Recovery

In Europe today, major bourses across the old continent pushed higher in the early trading hours of the market session. The pan-European Stoxx 600 gained almost 1% in the first few hours of Wednesday deals. Indexes of individual economies were higher between 0.80% and 1.40%.

Stocks in Europe finished the month of August on a strong note. The Stoxx 600 added roughly 2% for the month, boosted by strong earnings reports for the quarter and elevated optimism toward the economic recovery.

Looking ahead, market participants will be monitoring fresh Covid-19 data as the recent climb in cases and hospitalizations has threatened to overshadow the robust economic expansion. Investors are largely concerned that the rapid spread of the Delta variant could disrupt consumer spending and derail the economic reopening, particularly if new restrictions are imposed.

At the end of the week, traders and investors will be on the lookout for the latest jobs and unemployment figures. The August nonfarm payrolls and unemployment rate are slated for Friday. Market participants, along with the US Federal Reserve, will be parsing the data to find out whether the labor-market recovery remained on an upward trajectory in August. Nonfarm payrolls rose by 943,000 in July.

In cryptocurrency, bitcoin today is trading relatively flat and to the downside. The flagship token is now hovering slightly above the $47,000 threshold. Ether, on the flip side, has surged to levels above $3,500 per coin. The Ethereum token is seeing increased demand that has pushed its valuation above $410bn for the first time in three months.

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