• Futures for all three major indices show gains for Tuesday
  • Wall Street hopes to continue last week's rally that saw the Dow, S&P and Nasdaq end the week each 3% higher
  • A new fight against China over Hong Kong might scuttle market hopes, however

Investors Tuesday will likely see a continuation of last week's strong Wall Street rally, which saw the Dow Jones Industrial Average post its best weekly gain since April.

Tuesday's stock futures foretell a continuation of the Dow's overall good fortune when it rose 3.29% over five sessions last week despite shedding 0.37% to close at 24,465.16 Friday. The week ending May 22 was a solid week for the three indices: the Dow's 3.29% jump over this five-day period was its best weekly performance since April. The S&P 500 and the Nasdaq each rose more than 3% last week.

Futures seem to be cooperating. Dow futures for Tuesday rose 416 points, suggesting an opening jump of some 429 points. S&P 500 and Nasdaq 100 futures also pointed to a positive open for both major indices Tuesday. Markets were closed Monday for the Memorial Day holiday.

Investors expect good news from the healthcare front to drive Tuesday's expected rally. Last week, it was biotech firm Moderna that moved the market. On May 18, news that Modern's COVID-19 vaccine candidate appears to have generated an immune response to the coronavirus in only eight volunteers propelled the Dow 911.95 points higher, or 3.85%, to 24,597.37. Moderna shares surged 19.96% after the company reported “positive” phase one results for its COVID-19 vaccine candidate.

The optimism permeating the Dow infected both the S&P 500 and the Nasdaq as well. The S&P 500 rose 3.15% to close at 2,953.91 while the Nasdaq improved 2.44% to 9,234.83.

Moderna said its Phase 1 trial saw eight patients that received two doses of the vaccine develop "neutralizing antibodies" to SARS-CoV-2 (severe acute respiratory syndrome coronavirus 2), which is the virus that causes COVID-19. These antibodies are similar to those found in people that had recovered from COVID-19, said Moderna, which is based in Massachusetts.

The gains made by Dow and S&P 500 on May 18 were their biggest one-day gains since April 8; Nasdaq's gains were its best since April 29. The S&P 500 closed at its highest point since March 6.

Christian Fromhertz, CEO of The Tribeca Trade Group, last week said the data from Moderna removes some of the investment-dampening unknowns from the market.

Investors, however, are casting a nervous eye on the potential for Trump to escalate his fight with China. Rumblings last week indicating Trump intends to ignite a new geopolitical fight against China might be enough to bury any solid news that emerges in the fight against the pandemic.

On Sunday, National Security Adviser Robert O’Brien said the U.S. will likely impose sanctions on China if Beijing implements its proposed national security law giving it almost complete control over Hong Kong.