Despite a spike in COVID-19 cases over the holiday weekend, Wall Street is pointing to big gains at Monday’s open.
Futures for the Dow Jones Industrial Average surged more than 1.5%, or 300 points, at 9:00 a.m. ET, while S&P 500 futures grew 1.3%, or more than 40 points. Nasdaq Composite futures climbed 1.26%, or 131 points. The figures, which look to build on last week’s momentum, got a boost from a rally in Chinese equities, which led the Shanghai Composite Index to end the day up 5.7% — its highest close since February 2018.
China’s stock market improvements followed shortly after the country’s China Securities Journal, sponsored by influential state media outlet Xinhua News Agency, wrote that fostering a “healthy bull market” was now more important than ever, according to a Bloomberg translation of the report.
The commentary came amid a surge in new coronavirus infections both globally and in the United States: On Saturday, the World Health Organization recorded an all-time high of 212,326 confirmed COVID-19 cases over a 24-hour span. What’s more, some states that were among the first to ease restrictions saw their biggest number of cases over the weekend. In Florida, more than 11,400 new infections were confirmed on Saturday and another nearly 10,000 on Sunday, while Texas’ coronavirus illnesses rose by more than 8,200 on Saturday followed by close to 3,500 on Sunday.
The latest wave of coronavirus cases have led a number of local governments to scale back on their reopening plans. The possibility of renewed stay-at-home orders could pose a threat to consumer spending, which recently rebounded following significant plunges as scores of businesses were shuttered for weeks to curb the spread of COVID-19.
In the first three months of the year, America’s gross domestic product — which measures the output of U.S. goods and services — contracted at a seasonally adjusted annual rate of 5%. It marked the economy’s sharpest quarterly plunge since the 8.4% fall in the fourth quarter of 2008 at the height of the Great Recession.
Federal Reserve officials and private-sector economists are expecting a much worse decline in the next quarter, which counts the months of April — the majority of which the entire country spent on lockdown — through June. Some forecasts put the GDP drop at a nearly 30% annual rate.