Equity futures rose Monday night as major indices were on track to close out August trading with new monthly gains.
Contracts on the S&P 500 ticked up. Both the blue-chip index and the Nasdaq set new intraday records and closing highs during the regular trading day, propelled higher by a jump in heavily weighted Big Tech stocks.
The S&P 500 is on track to make a seventh consecutive monthly advance in August, towards a monthly gain of 3% and rising to nearly 21% for the year. The Nasdaq has outperformed so far in August, up 4%, as traders returned to growth and technology stocks. Meanwhile, the Dow – which is heavy in cyclical stocks with gains related to the economic recovery – underperformed, gaining 1.3% as concerns about the Delta variant have increased again in recent weeks.
Even given the rise of the S&P 500 to record highs, many strategists have made further gains.
BMO Capital Markets is the latest company to raise its year-end price target on the S&P 500 on Monday. The company’s chief investment strategist Brian Belski wrote in a new note that he now expects the index to end the year at 4,800 instead of 4,500. He cited the “buzzing speed” of corporate earnings in the second quarter, with the strengthening economic backdrop also helping earnings growth at many companies.
The current policy environment has also been conducive to further gains in stocks, other strategists note, given the still accommodative Federal Reserve policy tilt and prospects of further government spending with the infrastructure and budget alignment bills being discussed in Congress.
The Fed’s policy trajectory has been particularly closely watched as traders brace for the gradual easing of crisis-era support, such as the central bank’s $120 billion monthly asset purchase program. Still, key central bank officials, including Fed Chair Jerome Powell, have indicated they are waiting to monitor incoming data and the impact of the Delta variant on the economy before pushing ahead with policy action.
“We think the winding down in general will be a non-event, most likely because the market has had time to react this year,” James Liu, founder and CEO of Clearnomics, told Yahoo Finance. “The Fed has done a great job telegraphing all of this.”
“Whether it’s September or November for the taper announcement will really depend on the jobs report coming out and some more economic data,” he added. “But either way, the market seems to be expecting it at the moment. This is very different from 2013, when the market had to adapt very abruptly to wind down.”
6:06 PM ET Monday: Stock Futures Rising
These were the key moves as the overnight session kicked off Monday night:
S&P 500 futures (ES = F): +3.75 points (+0.08%) at 4.529.00
Dow futures (YM=F): +31 points (+0.09%) to 35,383.00
Nasdaq futures (NQ = F): +6.5 points (+0.04%) to 15.604.00
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck