Dow futures moved higher in overnight trading on Monday, putting the index on track to extend its rally from the regular session.
Dow futures rose 120 points. S&P 500 futures gained 0.4% and Nasdaq 100 futures rose 0.45%.
On Monday, the Dow Jones Industrial Average rallied more than 300 points on investor optimism about the economic comeback from the pandemic. At its session high, the 30-stock average jumped 650 points to hit an intraday record.
The bullishness was fueled in part by the Senate’s passing of a $1.9 trillion economic relief and stimulus bill on Saturday, which is set to include another round of stimulus checks. Banks, airlines, cruise lines and retailers all rose on hopes of a sharp economic rebound.
Additionally, the Centers for Disease Control and Prevention said Monday that people who’ve been fully vaccinated against Covid-19 can meet safely indoors without masks. The announcement came after the U.S. reached 3 million vaccinations over the weekend.
Technology stocks, meanwhile, continued their recent weakness as the Nasdaq Composite dropped 2.4%. The tech-heavy benchmark closed more than 10% below its Feb.12 closing high, falling into correction territory.
The S&P 500 also ended the day down about 0.5%, dragged down by shares of Tesla, PayPal, Etsy and Advanced Micro Devices.
The high-growth names have been pressured by rising interest rates lately. The U.S. 10-year Treasury yield stood around 1.6% on Monday. However, hedge fund manager David Tepper said the recent sharp rise in rates is likely over and it’s hard to be bearish on stocks right now.
Monday’s “initial rally was due primarily to news over the weekend that President Biden’s relief package had passed,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “Ultimately, however, equity investors are currently obsessed with bond yields keeping the Nasdaq and S&P 500 technology sector under pressure all day. Since the 10-year bond yield failed to pull back from the 1.6% level near the close today, eventually pressure on technology stocks intensified going into the close.”
“Nonetheless, most of the stock market had a nice day as small caps stocks and several reopening sectors posted healthy gains,” added Paulsen.
The small-cap benchmark Russell 2000 gained about 0.5% on Monday.