Dow, S&P Futures Change Little After Historic Day on Wall Street

KEY POINTS

Dow Jones Industrial Average rose 1.5% on Tuesday, about 454 points
S&P 500 closed at an all-time high after rallying 1.6%
This was Dow's biggest monthly rally since 1987

The U.S. stock futures slightly rose early Wednesday after a historic day on Wall Street when the Dow surged past the 30,000 mark for the first time ever.

Dow Futures on Wednesday morning increased by 0.1%, while S&P 500 futures moved up by 0.1%. Nasdaq 100 futures also gained around 0.4%.

On Tuesday, the Dow Jones Industrial Average increased by 1.5%, about 454 points, and S&P 500 rallied by 1.6% to its all-time closing high. This rally was the Dow’s biggest monthly increase since 1987, up more than 13%. The Russel 2000 index also hit a new high, increasing more than 20% in November alone.

EV rivals Nio and Tesla traded at all-time highs on Tuesday, with Tesla blowing past a $500 billion market cap. New companies on the block including Corsair Gaming and Palantir also surged.

The market shot up due to news of a possible vaccine and the starting of inoculations in mid-December. It was also optimistic about the incoming Biden government.

“The recovery is intact and the world likely reopens in the second half of 2021, but a lot of optimism is priced in already on vaccine/recovery. Vaccine execution risk, delayed fiscal stimulus and longer lockdowns are risks,” Bank of America noted on Tuesday.

Pfizer with partner BioNTech and Moderna posted promising results from their vaccine candidates earlier this month. Pfizer has already filed for emergency approval of its vaccine. Apart from these two, AstraZeneca posted this week a 70% efficacy rate of its vaccine.

Apart from the news of the vaccine, markets are also rejoicing on account of more political clarity. After over two weeks of delay, the Trump administration initiated the formal transition process to President-elect Joe Biden. The news of Janet Yellen, former Federal Reserve Chair, being nominated as Treasury Secretary has also cheered the markets.

The markets have changed vigorously upon vaccine news. Donghoon Lee, a researcher at the Federal Reserve Bank of New York, said last week that borrowers were taking advantage of the low-interest rate environment.