Stock futures pause after Wall Street scores a round of record highs

U.S. stock futures struggled for direction Friday, after benchmark indexes closed at record highs on Thursday, with investors focused on talks in Washington over another round of economic relief.

What are major benchmarks doing?
  • Futures on the Dow Jones Industrial Average YM00 were up 8 points at 30,210.
  • S&P 500 futures ES00, +0.12% rose 4.70 points, or 0.1%, to 3,717.50.
  • Nasdaq-100 futures NQ00, +0.06% were up 7.50 points, or 0.1%, at 12,758.50.

Stocks rose modestly Thursday, with gains carrying the Dow DJIA, +0.49%, S&P 500 SPX, +0.58%, Nasdaq Composite COMP, +0.84% and the small-cap Russell 2000 RUT, +1.30% to record finishes.

What’s driving the market?

Republican and Democratic lawmakers continued to negotiate toward a $900 billion package of economic relief that would send checks to households, extend unemployment benefits and provide aid to small businesses. At the same time, a midnight Friday deadline to complete a bill funding government operations loomed, leaving the possibility of a government shutdown in the midst of a worsening pandemic.

Still, the path of least resistance for equities may remain to the upside on continued expectations that a worsening economic backdrop, as illustrated by a Thursday rise in first-time jobless claims data, will push Congress to complete a deal, analysts said.

“Lawmakers from both major U.S. political parties said that failing to agree on a COVID-relief package is not an option, while Republican Senate Majority Leader Mitch McConnell said that talks could spill into the weekend,” said Charalambos Pissouros, senior market analyst at JFD Group, in a note. “In our view, this suggests that a bill is more likely than not to pass before the end of the year. “

Meanwhile, a second COVID-19 vaccine is expected to soon be rolled out. An independent advisory committee on Thursday voted 20-0-1 that the benefits of Moderna Inc.’s MRNA, +5.09% COVID-19 vaccine candidate outweigh the risks, a recommendation that sets the stage for a likely Food and Drug Administration authorization. Moderna shares were down 1.7% in premarket trade.

Inoculations using the vaccine developed by Pfizer Inc. PFE, +0.50% and BioNTech SE BNTX, +0.61% began earlier this week.

There were 238,189 new COVID-19 cases reported in the U.S. on Thursday, down slightly from 245,033 on Wednesday, according to data provided by the New York Times. Deaths fell from Wednesday’s record of 3,611 to at least 3, 293 on Thursday, remaining above the 3,000 level for a third straight day.

The U.S. economic calendar is light to end the last full trading week of 2020, with third-quarter data on the current account deficit due at 8:30 a.m. Eastern and a reading on leading economic indicators from the Conference Board for November due at 10 a.m.

Which companies are in focus?