Stock futures pointed to opening gains on Tuesday after a strong performance in technology shares pushed the S&P 500 in positive territory for the year.
Dow Jones Industrial Average futures implied a gain of over 200 points at the open. S&P 500 and NASDAQ 100 futures also traded higher.
The overnight action followed a strong performance in technology shares on Monday that pushed the NASDAQ up 2.5%. Amazon led the gains in popular tech names with a 7.9% climb on Monday, its best day since December 2018. The NASDAQ 100, that consists of the 100 biggest non-financial firms in the composite, popped 2.8% for its biggest one-day gain since April.
IBM gained 4.7% in extended trading after the company reported better-than-expected second-quarter earnings. Notably, IBM improved gross margins in three of its five units in the past quarter.
“We expect strong growth-company balance sheets and low interest rates to support higher valuations for growth stocks than for value stocks in the close to term,” Shayne Heffernan, CEO and Founder of Heffx, said in a note on Monday.
With Monday’s gains on Wall Street, the S&P 500 turned green for 2020 with a 0.6% gain on the year, while the NASDAQ has risen 20% this year. The 30-stock Dow lagged, however, down 6.5% for 2020.
Investors are also watching the talks in Washington on the next coronavirus relief bill. Lawmakers face pressure to pass legislation before the end of the month, when the $600 per week federal unemployment insurance benefit is about to expire.
“I believe the stock market would benefit from news of a stimulus package coming to fruition,” Shayne Heffernan, said in a note on Monday. “In times like this, despite a huge and rising budget deficit for the United States, I believe big government is likely to be good news for the stock market.”
More companies will report quarterly earnings on Wednesday. Coca-Cola and philip Morris are set to drop results before the bell, while United Airlines will report after the close.