U.S. stocks were set to rise on Wednesday as investors hoped that COVID-19 vaccine rollouts and a bigger fiscal aid would help the world’s largest economy recover from a pandemic-fueled slump in the next year.
Boosting sentiment, Britain approved the emergency use of AstraZeneca and Oxford University’s COVID-19 vaccine, which will start being administered on Monday, beginning with those most at risk.
Meanwhile, the chances of a bigger stimulus check dimmed on Tuesday after Senate Majority Leader Mitch McConnell blocked a quick vote to back President Donald Trump’s call to increase COVID-19 relief checks.
The move resulted in Wall Street’s three main indexes slipping from intraday record highs in the previous session.
“The market is of the view that U.S. households will receive additional support a few months down the line even if the government decides to pull back higher stimulus checks,” said Piotr Matys, FX strategist at Rabobank.
At 09:00 a.m. ET, Dow e-minis were up 51 points, or 0.17%, S&P 500 e-minis were up 9 points, or 0.24%, and Nasdaq 100 e-minis were up 57.75 points, or 0.45%.
Meanwhile, the first known U.S. case of a highly infectious coronavirus variant discovered in Britain was detected in Colorado.
Scientists believe the new variant is more contagious than previously identified strains of the SAR-CoV-2 variant but no more severe in the symptoms it causes.
“The bigger question is if the vaccine effective against the new strain or not. If the answer is yes, the recovery rally continues and if it is no, that’s a serious issue,” said Dennis Dick, a trader at Bright Trading LLC.
To date, the pandemic has infected more than 19 million people and killed over 334,000 in the United States.
However, trillions in dollar of stimulus and progress in developing vaccines helped the benchmark S&P 500 index, bounce back nearly 70% from its late-March trough.
The index is on course to end the month with a 3% gain after a 10.8% rally in November.
Technology mega-caps such as Apple Inc and Amazon.com Inc powered much of this year’s gains, but have taken a backseat in recent weeks as investors shifted to economically sensitive sectors on cheaper valuations and hopes of an eventual recovery.
Oil stocks rose in premarket trading with ConocoPhillips up 1.1%, while banking shares also edged higher.
U.S.-listed shares of Chinese e-commerce firm JD.Com Inc added 1.6% after its board authorized the company to explore feasibility of potential unit spin-off.
Covid-19 vaccine developers like Inovio Pharmaceuticals, Pfizer Inc, BioNTech SE and Johnson & Johnson and Moderna Inc gained between 0.9% and 2.4% after UK approved AstraZeneca’s COVID-19 shot.
Trading is expected to remain light in the holiday-shortened week, which could boost volatility in the market.
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