Futures contracts tied to the major U.S. stock indexes rose early Monday, rebounding from losses last week, as investors grew optimistic about the economy reopening. Comments from the Federal Reserve chief also added to the bullish sentiment.
Dow Jones Industrial Average futures jumped 405 points, or 1.7%. The gains implied an open higher by more than 300 points. S&P 500 futures added 1.6%. Nasdaq-100 futures were up 1.4%.
Oil jumped 7% in early trading, also helping sentiment.
“There’s a lot more we can do,” said Federal Reserve Chairman Jerome Powell to CBS’ “60 Minutes.” “We’ve done what we can as we go. But I will say that we’re not out of ammunition by a long shot. No, there’s really no limit to what we can do with these lending programs that we have.”
The central bank leader also said he’s “highly confident” the U.S. economy will claw its way back from the current pullback, but warned that it may not fully recover until a Covid-19 vaccine is complete.
“Don’t fight the Fed,” wrote FundStrat’s Tom Lee to clients after the interview.
The Nasdaq Composite and S&P 500 fell 1.1% and 2.2%, respectively, last week with the latter notching its worst week since March. The Dow industrials finished the week down 2.65% for its third negative week in four and its worst week since April 3.
Wall Street’s veteran investors say stocks could be in for choppy trading until it’s clear that state efforts to reopen their economies aren’t met with significant spikes in new cases of Covid-19. This weekend most states either partially or completely ended lockdowns.
A flurry of recent economic data, including record-setting unemployment figures and a 16.4% plunge in April retail sales, show just how abruptly state-imposed business closures impacted the broader U.S. economy.
—CNBC’s Jeff Cox and Patti Domm contributed reporting.
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