U.S. stock futures were largely flat in early morning trade Wednesday, after the S&P 500 hit its highest level ever, wiping out all the losses from the coronavirus sell-off.
Dow futures dipped 11 points. S&P 500 futures were flat while Nasdaq 100 futures traded marginally lower..
On Tuesday, the S&P 500 rose to its highest level ever, gaining back all of the index’s coronavirus-related losses. The 500-stock average rose 0.2% to a record close of 3,389.78. It also traded above its Feb. 19 intraday record of 3,393.52 earlier in the trading day. The S&P has rallied more than 54% from its March low, bringing an end to the shortest bear market in U.S. history.
“The market gains were led by the mega-cap technology names typified by the Nasdaq, with value stocks, small cap stocks, foreign developed markets, and emerging markets trailing badly behind,” Marc Odo, portfolio manager at Swan Global Investments, told CNBC.
The Nasdaq Composite also notched a record on Tuesday after gaining 0.7%, helped by a 4% gain in Amazon and a near 2% gain in Netflix. The Dow Jones Industrial Average dipped 66 points.
“Reaching a new all-time high may be a quickly forgotten speed bump in an ongoing new bull market, but if not substantially passed in the coming weeks, it could also prove to be a nagging glass ceiling that will continue to perpetuate fears this really is just a big bear market rally,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “Bulls need to ask whether the stock market may finally be getting ahead of its fundamentals while bears are forced to ask whether they are too underweighted in what could be just the beginning of a new bull market.”
Shares of retailers capped the major averages gains on Tuesday, despite Walmart and Home Depot’s better-than-expected quarterly results. Kohl’s plunged more than 14% after the company offered a grim outlook ahead of the all-important holiday season.
Retail earnings continue on Wednesday with big-box retailer Target and home improvement company Lowe’s reporting before the opening bell. TJX Companies also reports Wednesday morning. Closely watched chip stock Nvidia reports quarterly results after market close on Wednesday.
Investors are still eyeing a second coronavirus stimulus bill from Washington. Treasury Secretary Steven Mnuchin criticized Democratic leaders as obstinate and unwilling to discuss a smaller relief package on Tuesday; however, Politico reported House Speaker Nancy Pelosi said she is was willing to cut some demands to get an agreement on the bill.
The Federal Open Market Committee will publish its meeting minutes from its June meeting on Wednesday at 2:00 p.m. ET.
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