Wall Street’s main indexes were set to open at fresh record highs on Tuesday since bets that fiscal aid will speed up a vaccine-led recovery in the economy, boosted sentiment in the final days of the year.
After President Donald Trump signed a long-awaited $2.3 trillion fiscal bill, restoring jobless benefits and averting a federal government shutdown, the three main indexes closed at all-time highs on Monday, led by pandemic-battered stocks.
A proposal to increase the COVID-19 payment checks to $2,000 from $600 is before the Republican-controlled Senate, where it faces a much tougher path for approval. The Democratic-led U.S. House of Representatives had approved the proposal on Monday.
Meanwhile, more than 2 million Americans have been inoculated, helping investors overlook a surge in infections that topped 19 million, with California, a major U.S. virus hot spot, likely to extend strict stay-at-home orders.
“The market is seeing the additional stimulus as a way to get through at least the short term with money being put into the hands of individuals,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
“The focus is that people are going to probably most likely spend that [money], which would help the economy progress a little bit further.”
Unprecedented monetary as well as fiscal stimulus and positive vaccine data have helped the S&P 500 recover from a virus-led crash in March.
The benchmark index is looking at its best fourth-quarter performance since 2011 as investors returned to economically sensitive stocks from the so-called ‘stay-at-home’ plays on hopes of economic recovery.
At 08:33 a.m. ET, Dow E-minis were up 125 points, or 0.41%, S&P 500 E-minis were up 14 points, or 0.38%. Nasdaq 100 E-minis were up 56.25 points, or 0.44%.
Trading volumes is expected to be thin in a historically strong final week for equities, with worries over a mutating coronavirus strain and upcoming U.S. Senate runoffs in Georgia posing as short-term concerns.
Shares of plane-maker Boeing Co. added 1.3% in pre-market trade as American Airlines was set to restart U.S. 737 MAX commercial flights on Tuesday morning.
Cruise operators Royal Caribbean Cruises, Norwegian Cruise Line Holdings and Carnival Corp. rose between 1.3% and 2%, while stocks of major airline operators rose between 0.7% and 1.3%, with American Airlines leading gains on hopes of a gradual recovery in travel demand.