Futures contracts were mostly higher on Monday as major US stock indices float near records.
Dow futures gained 109 points while those linked to the S&P 500 were up 0.1%. Nasdaq 100 futures were 0.3% lower.
The moves came after last week’s trading ended positive and both the Dow Jones Industrial Average and S&P 500 hit new all-time highs on Friday.
Gasoline futures rose after a ransomware attack over the weekend forced the closure of the largest U.S. fuel pipeline. The Colonial Pipeline, which operates a 5,500-mile system, said it was forced to stop transporting fuel from the Gulf Coast to the New York subway region on Friday because “certain systems went offline to serve the Contain the threat “. Colonial said Sunday night that some of its smaller sidelines are back online but that its main lines are still closed.
Stocks of energy stocks gained in the pre-market including Marathon Oil, Occidental Petroleum and Devon Energy. Chevron was up 1% in early trading looking to give the Dow a boost. Exxon was also higher in early trading.
Cybersecurity stocks also gained in early trading. FireEye’s shares rose 6% in premarket trading. Fortinet and CrowdStrike were also higher.
However, larger tech stocks fell in early trading, which weighed on sentiment. Tesla was down 1%. Oracle lost nearly 1% after downgrading from Barclays. Facebook and Alphabet were also lower after being downgraded by Citigroup.
Last week the Dow was up 2.7% and the S&P 500 was up 1.2%. Despite a 0.9% rally in the last session of the week, the Nasdaq Composite lost 1.5% over the same period.
The late week’s optimism came despite a far weaker-than-expected job report in April that showed U.S. employers completed 266,000 net payrolls last month. Economists polled by Dow Jones had expected 1 million new entrants.
Mike Wilson, chief US equities strategist at Morgan Stanley, noted that traders appear to have already priced in a robust economic reopening due to declining Covid-19 cases. Any news that could threaten this narrative could quickly affect where portfolio managers allocate cash
“We’re watching expectations versus reality as the reopening market is now at a good price. Cumulative retail sales are above what it would have been before COVID trends – suggesting some expectation risk related to the pent-up demand narrative suggesting, “Wilson wrote over the weekend.
“The job market is less loose than usual at this point in the cycle,” he added. “We recommend moving the quality curve up and creating a more defensive balance as the market shifts towards mid-cycle leadership.”
The market will undergo a major test on Wednesday with the release of CPI inflation data. Investors fear a scenario in which the Federal Reserve will be forced to cut its loose monetary policy to contain inflation before the economy has fully recovered from the pandemic.
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