Stock futures opened mixed Tuesday evening, steadying after jumping to record levels earlier in the day.
The three major indices posted a strong start to December, with the S&P 500 and Nasdaq rising more than 1.1% each on Tuesday to fresh closing record highs. The tech-heavy communication services and financials sectors led the day’s advances in the S&P 500, as tech stocks rejoined the rally after cyclical and value stocks led November’s gains.
Shares of Dow component Salesforce.com (CRM) fell more than 4% in late trading after announcing it would be purchasing workplace messaging software company Slack (WORK) in a deal valued at $27.7 billion, confirming a week’s worth of media reports over the tie-up. The announcement coincided with Salesforce’s third-quarter earnings results, which topped estimates, though its fourth-quarter profit guidance disappointed.
For the broader market, investors kept cheering upbeat developments around the approval and distribution of a COVID-19 vaccine, with both Pfizer and Moderna having filed for emergency use authorization for the vaccines with the U.S. Food and Drug Administration. Vice President Mike Pence told governors on Tuesday that some doses of the vaccine could start being distributed as early as the middle of this month, according to CBS News. Many health experts expect widespread distribution of the vaccines will take place mid-next year.
But in the meantime, Americans continue to contend with the coronavirus pandemic and the economic fallout it has produced. Still, congressional lawmakers and administration officials appear far from a consensus over the size and scope of an additional fiscal stimulus package that could held cushion the economic blow from the virus. A group of Republican and Democratic lawmakers unveiled a $908 billion stimulus proposal on Tuesday, though Senate Majority Leader Mitch McConnell, who has favored a smaller relief bill, rejected the proposal, according to CNBC.
Equity investors, however, have so far mostly looked through the ongoing tug-of-war for more stimulus out of Washington.
“Without any sort of fiscal stimulus over the coming months, I think the economic slowdown, the quote-unquote double dip recession or pullback as some have called it, becomes more likely,” Ross Mayfield, Baird investment strategy analyst, told Yahoo Finance on Tuesday. “But we’ve seen all year that the stock market can look past some economic damage on the ground if the outlook is bright in the future, and that’s what the vaccine has provided.”
“I do think that any kind of positioning in stocks has to be made knowing the stock market will look out past April, May when the vaccine is fully available,” he added.