U.S. stock futures rose sharply in premarket trading Monday, with investors showing hope about the economy’s ability to overcome the surge in Covid cases and focusing on progress from the nation’s automakers.
Futures tied to the Dow Jones Industrial Average jumped 191 points, or about 0.5%. S&P 500 and Nasdaq 100 futures both advanced about 0.6%.
Tesla helped the market generate some early momentum, rising 7.6% in premarket trading after the electric vehicle company reported 308,600 deliveries in the fourth quarter, beating expectations.
Reopening stocks also pushed higher in early action. Alaska Air rose 2.3%, while Carnival and Norwegian Cruise Lines gained about 2% apiece. Along with Tesla, big automakers also saw their shares climb, with Ford Motor and General Motors each climbing 1.6%.
The move in futures comes after markets closed out a strong 2021 last week. The S&P 500 rose nearly 27% for the year, with the Nasdaq Composite and Dow also posting large returns. Stocks fell slightly on Friday, but the S&P 500 and Dow were positive for the final week of the year.
The new year starts with continued uncertainty around the Covid-19 pandemic. The rise of the omicron variant helped lead to thousands of flight cancellations during the holiday season and has led some businesses and schools to consider temporary closures. Several major Wall Street banks have asked employees to work from home for the first few weeks of January.
Infectious disease expert Dr. Anthony Fauci told ABC’s “This Week” on Sunday that U.S. health officials may soon update guidelines to include a testing recommendation to signal when a person who previously tested positive for Covid can leave isolation.
Inflation and monetary policy are also expected to be key themes for 2022, as investors expect the Federal Reserve to hike rates multiple times in the coming year to help cool the rise in prices for consumers.
“Just as for the economy as a whole, the market story for 2022 will be a return to normal. As hiring continues, spending grows, and businesses hire and invest, the economy will be normal. The government is normalizing policy on the same expectations. When you look at the macro picture, the overarching theme is 2022 will bring us back to something like normal,” Brad McMillan, chief investment officer for Commonwealth Financial Network, said in a note to clients on Friday.
The first week of the year will be a busy one for economic data, with the key December jobs report slated for a Friday morning release. On Monday, investors will get updated looks at manufacturing activity and construction spending.