Stock futures traded slightly higher as the overnight session kicked off, after the three major indices closed at their highest levels in more than one month earlier in the day.
Traders clung to hope that some aid out of Washington – if not a multi-trillion dollar, comprehensive virus relief package – might transpire in the near-term.
House Speaker Nancy Pelosi said Wednesday that she would be open to passing a bill to provide relief to airlines specifically, after President Donald Trump said late Tuesday that he would approve piecemeal measures including airline aid.
However, Pelosi also signaled that she would not be open to advancing a bill that would authorize another round of $1,200 direct checks to taxpayers, saying that that on its own would be insufficient to address the Covid-19 crisis. House Democrats last week voted to advance a larger package to inject another $2.2 trillion in aid to various parts of the economy.
Airline stocks, along with travel and leisure names, were flat to slightly higher in late trading, largely holding onto gains from the regular session Wednesday.
“It’s been the question of the day, as to why we got the tweets we got over the last 24 hours, the market reaction we got into [Tuesday’s] close, and then the rally today,” Ed Mills, Raymond James Washington policy analyst, told Yahoo Finance Wednesday afternoon.
“Investors I’ve spoken to at Raymond James have been mixed. Some believe that this makes it much more likely that regardless of the outcome of the election, there’s a deal to be had in the lame duck [session] before the Dec. 11 deadline to funding the government,” he added. “Others said this is a clear signal from the market that they are now expecting a Democratic sweep. That would be the package that would be the largest. However, that might have to wait until February or March to be fully implemented.”
Meanwhile, Federal Reserve officials continued to voice their concerns that the tenuous economic recovery would be weakened in absence of further near-term fiscal stimulus.
In minutes released Wednesday covering the central bank’s September meeting, the central bank said that “many participants noted that their economic outlook assumed additional fiscal support and that if future fiscal support was significantly smaller or arrived significantly later than they expected, the pace of the recovery could be slower than anticipated.”
Another sign of tepid economic activity is expected to come Thursday morning in the Labor Department’s weekly jobless claims report. Consensus economists expect to see another 820,000 new claims filed last week, for a small step down from the 837,000 reported during the previous week.
6:04 p.m. ET Wednesday: Stock futures open slightly higher after rally
Here were the main moves in equity markets, as of 6:04 p.m. ET:
S&P 500 futures (ES=F): 3,408.75, up 2 points or 0.06%
Dow futures (YM=F): 28,197.00, up 18 points or 0.06%
Nasdaq futures (NQ=F): 11,481.75, up 11.75 points or 0.1%