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U.S. Index Futures Advance as Volatility Keeps Traders on Edge

Heejin Kim
·2 min read

(Bloomberg) -- U.S. stock index futures erased losses to trade in positive territory as investors assessed the prospects of a stimulus bill, a potentially bumpy transition of power in the White House and the advance of a large-scale coronavirus vaccine study.

December contracts on the S&P 500 were up 0.2% at 8:41 a.m. in London, after sliding as much as 0.9%. Futures rose 0.3% on both the Dow Jones Industrial Average and the Nasdaq 100 Index. The Cboe Volatility Index, which moves in the opposite direction of the equity benchmark about 80% of the times, increased for the first time this month on Monday.

“Markets are on edge after the volatility seen overnight, so it is not taking much volume-wise to move the index futures around,” said Jeffrey Halley, a senior market analyst with Oanda Asia Pacific Pte.

Markets remain in bullish mood following news that a shot being developed by Pfizer Inc. and BioNTech SE delivered promising results in a trial. Still, overnight moves left a mark at a sector level as stocks more exposed to an economic rebound, such as financials and industrials, surged while their more defensive peers, like technology and staples, retreated.

In Europe, the Stoxx 600 index was also volatile, rising as much as 0.4% before dropping as much as 0.3%. Banking shares led gains among sectors, while technology stocks dropped the most.

The underlying S&P 500 moved away from record levels on Monday as Senate Majority Leader Mitch McConnell said Congress should pass only a limited bill before the end of 2020. Meanwhile, the Federal Reserve warned that asset prices in key markets could take a hit if the pandemic’s economic impact worsens in coming months.

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©2020 Bloomberg L.P.

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