Futures for major benchmark indices rallied in Monday premarket trading after Wall Street suffered its largest weekly drop in nearly two months amid the coronavirus pandemic.
Contracts tied to the Dow Jones Industrial Average improved 2.8%, or 668 points, as of 8:30 a.m. ET, while S&P 500 futures rose 2.6%, or 75 points, and Nasdaq Composite futures gained 2%, or 188 points. Shares seemed to advance on the Federal Reserve’s pledge to offer more support to the battered United States economy as well as news of a potential vaccine for COVID-19, which has sickened more than 1.48 million people in the country and killed at least 89,500 others.
Last week, the stock market took a nosedive after a range of government data showed the impact of the health crisis on the economy: On Wednesday, the Treasury Department reported that spending in the country climbed to a historic high of $979.71 billion last month, while revenues plummeted 55% from the prior year to $241.86 billion. That totaled a budget deficit of $737.85 billion for the month of April. (Comparatively, monthly spending averaged roughly $384 billion the previous year.)
A day later, the Labor Department noted that seasonally adjusted jobless claims for the week ended May 9 hit 2.98 million. That brings the two-month count of people who applied for unemployment benefits to more than 36 million. Then on Friday, the Commerce Department added that retail sales amounted to $403.9 billion for the month of April — a whopping 16.4% plunge from the previous month and 21.6% below sales during the same period last year.
On Sunday, Federal Reserve chairman Jerome Powell warned that the U.S. economy faces a more-than-yearlong recovery. The unemployment rate is expected to continue its increase through June and start to decline as more businesses reopen their doors. However, the central bank promised to do what it could to soften the economic blow of the pandemic.
“There’s a lot more we can do,” Powell told CBS’s “60 Minutes.” “We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot.”