People hike by the New York Stock Exchange (NYSE) on May 18, 2020 in New York City.
Spencer Platt | Getty Images
U.S. stock comings rose on Sunday night after a sell-off in tech shares led to the market’s first back-to-back weekly declines in months.
Dow Jones Industrial Average futures traded 290 points euphoric. The S&P 500 and Nasdaq 100 futures were also in positive territory.
Sentiment was lifted in part by news of Nvidia obtaining chip maker Arm Holdings from SoftBank for $40 billion. Nvidia will finance the deal through a blend of cash and common stock.
The S&P 500 fell by 2.5% last week. It was the broader-market index’s worst one-week take off since June 26. That decline also marked the first time since May that the S&P 500 compact lower in two straight weeks.
Those losses were driven in large part by a steep drop in tech, the best-performing market-place sector year to date. The S&P 500 tech sector plunged more than 4% for its biggest weekly disadvantage since March. Apple, the biggest U.S. company by market cap, dropped more than 7% last week.
“The disproportionate Technology froth from August has been wiped away, but in its wake, clear and ominous topping patterns predilection … developed,” said Frank Cappelleri, executive director at Instinet, in a note.
To be sure, Sean Darby of Jefferies ponders this decline in tech could be short-lived.
“There is nothing untoward about the fundamentals nor earnings expectations. An upside stupefaction would come from further dollar weakness, while the emergence of a vaccine and/or a rise in long-term rates wish curb performance,” said Darby, a global equity strategist at the firm.
Investors are coming into the new week midst dwindling hope of lawmakers striking a deal on new fiscal stimulus.
Senate Majority Leader Mitch McConnell, R-KY, believed on Friday the chances of Republicans and Democrats reaching a deal don’t “look that good right now.” Earlier this month, Organization Speaker Nancy Pelosi, D-Calif., said Democrats and the White House had “serious differences” over coronavirus aid.
Meantime, the number of U.S. coronavirus cases are growing by 5% or more in 11 states, according to a CNBC analysis of Johns Hopkins University information. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said last week that up to date coronavirus data was “disturbing.”
In corporate news, ByteDance rejected Microsoft’s bid to buy TikTok’s U.S. operations.
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