A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York City, USA, 20 August 2021.
Andrew Kelly | Reuters
Stock futures were higher in early trading on Monday after a volatile week on Wall Street as investors watched a major event where the Federal Reserve could point to prospects for stimulus tapering.
Futures pegged to the Dow Jones Industrial Average jumped 170 points. S&P 500 futures and Nasdaq 100 futures were both also positive.
Vaccine maker stocks are higher in pre-trading hours as investors watch the FDA, which will give the Pfizer-BioNTech Covid-19 two-dose vaccine full approval on Monday. Pfizer is up about 3% and BioNTech is up 7%.
Bitcoin hit a three-month high on Sunday, hitting over $ 50,000, driving crypto-related stocks higher. Coinbase rose 3% in early trading while Microstrategy climbed 4%.
Key averages are declining after a lost week as investors worried that the Fed’s potential move to withdraw monetary stimulus could slow the economic recovery already being challenged by the spread of the Delta-Covid-19 variant .
Traders are eagerly awaiting the Jackson Hole Symposium for guidance on the Fed’s schedule to withdraw from its $ 120 billion monthly bond purchase program. The event takes place virtually on Thursday and Friday. The Fed previously wanted to hold the event in a mixed virtual and live presentation, but decided on Friday to go completely virtual in view of the rising virus risk.
Chairman Jerome Powell’s speech will be titled “The Economic Outlook,” which may suggest the speech may have a shorter-term focus, “Nomura economist Aichi Amemiya said in a note.
“Given the recent deterioration in incoming data and the pandemic situation, we see some risk that Powell will focus on the increased uncertainty due to the recent surge in COVID-19,” added Amemiya. “At least we see recent comments from Fed officials as support for our view of a December throttling announcement despite a FOMC preference for November from the July meeting.”
The blue-chip Dow fell 1.1% last week while the S&P 500 was down nearly 0.6%, breaking a two-week winning streak. Tech-heavy Nasdaq lost 0.7% over the week.
“We suspect that investor beliefs are being challenged by the potential for impending monetary policy changes, changing growth and value rotations, and increasing development of new coronavirus cases,” said Craig Johnson, technical market strategist at Piper Sandler, in a note .
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For the month of August, the major benchmarks will post modest gains. The S&P 500 is up 1.1% for the month to date, while the blue-chip Dow is up 0.5% and the Nasdaq is up 0.3%.
“August is a historically volatile month for the markets and this year is no different as investors are currently climbing multiple walls of worry,” said Rod von Lipsey, managing director of UBS Private Wealth Management. “Upward trends in Covid-19 cases and a downward spiral in Afghanistan are leading to a crisis of confidence at a time when many investors are on vacation.”
Meanwhile, Bitcoin topped the $ 50,000 mark on Sunday and hit a more than 3-month high. According to Coin Metrics, it traded at $ 50,482.40 on Monday at 8:00 a.m. ET.