Wall Street indexes were set to rise on Monday as energy and bank stocks recovered slightly from last week’s losses, while upcoming economic data and an expected announcement on the next Federal Reserve chair kept gains in check.
Nasdaq index futures hit a record high as demand for technology stocks remained strong. Heavyweights including Amazon (AMZN.O), Apple (AAPL.O) and Meta Platforms (FB.O) rose between 0.2% to 0.7% in premarket trade.
The tech sector outperformed last week, helping the Nasdaq (.IXIC) close over the 16,000 level for the first time as concerns over rising COVID-19 cases in Europe drove up safe-haven demand.
“My guess is that (tech demand) is short lived and it’s just a reaction to the increase in cases. We will see a bid for some of the laggard stocks and as this blows over, will have a more balanced market,” said Thomas Hayes, managing member, Great Hill Capital LLC, New York.
Bank stocks were set to recover from steep losses logged last week, when safe-haven demand sent Treasury yields down sharply. Shares of major Wall Street lenders rose between 0.3% and 0.7% as yields rose on Monday.
Travel and energy stocks, which were among the worst performers last week, also marked small gains before the open.
Still, overall gains were constrained as investors awaited an announcement this week from U.S. President Joe Biden on his pick for the next Fed chair. The White House has promised he will make a decision on a Fed chair before Thanksgiving.
Current chair Jerome Powell is widely expected to stay on for another term, although Fed Governor Lael Brainard is also seen as a candidate for the position.
“In the case of Powell, the market will take it in its stride … (with) Brainard you’d see some short-term volatility just until the market can get some sense of where she wants to steer the ship,” Hayes said.
Investors were also awaiting a slew of economic data this week, including IHS business activity readings, personal consumption expenditure, and minutes of the Fed’s latest meeting.
At 08:17 a.m. ET, Dow e-minis were up 31 points, or 0.09%. S&P 500 e-minis were up 8.25 points, or 0.18%, and Nasdaq 100 e-minis were up 55.75 points, or 0.34%.
Tesla Inc (TSLA.O) gained 2.4% after CEO Elon Musk tweeted that the Model S Plaid will “probably” be coming to China around March.
Activision Blizzard (ATVI.O) slipped 1.2% after a media report that the video game publisher’s top boss, Bobby Kotick, would consider leaving if he cannot quickly fix culture problems.