Futures contracts, which are pegged to the major US stock indices, changed little on Monday after the S&P 500 posted its best week since February and a new record on Friday.
Futures pegged to the S&P 500 hovered around the flatline and those pegged to the Dow Jones Industrial Average fell 17 points. Nasdaq 100 futures rose 0.2%.
A massive, bipartisan infrastructure deal appeared to be resurrected on Sunday evening after President Joe Biden made it clear on Saturday that he would not veto the bill if it comes without a separate Democrat-favored reconciliation bill. Republican senators then said on Sunday that the deal can move forward.
The president, flanked by a bipartisan group of senators, said Thursday that after weeks of negotiations, the group had reached a billion-dollar deal to improve the country’s roads, bridges, waterways and broadband. Democrats are pushing for a second bill that would include funding for issues such as climate change, childcare, health care and education.
Caterpillar stocks were higher in the pre-trading session and should add to their gains last week.
“The bipartisan infrastructure deal negotiated in Washington DC last week seems to have a chance of becoming a reality,” wrote John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, in a press release. “This program could serve the country in the short and long term in job creation, economic growth, corporate sales and profit growth, and US ability to compete with other nations in the relatively new but hypercompetitive twenty-first century compete.”
Stocks had their best week in months on Friday as investors become more confident that current US inflation is not a persistent economic threat, but rather a temporary upward trend.
The S&P 500 finished Friday with a record high of 4,280.70 while the Dow rose 237.02 points, less than 2% off its record high. While the Nasdaq Composite closed slightly lower on Friday, it rose 2.35% for the week, its best since April 9, and rose 4.45% for the month of June.
The weekly gains even came after the Commerce Department reported that the inflation indicator rose 3.4% in May, the fastest increase since the early 1990s.
Spikes in the core consumer spending index can cause heartburn among investors as the Federal Reserve likes to watch it for signs of inflation. Still, the increase actually fell short of what economists polled by Dow Jones had forecast, and reaffirmed for investors that macroeconomic price increases are likely to be temporary and manageable.
The next key economic data is the June job report that the Department of Labor is slated to release on Friday.
Economists expect the number of non-farm workers to have increased by 683,000 in June. While such a robust figure would top 559,000 in May, it would still be below the 1 million some had hoped a US economy could see a rebound after the Covid-19 crisis.
Investors will also check the June report for signs of wage inflation as employers struggle to find workers to fill positions and pandemic-era unemployment benefits run out in some states.
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