Dow Futures 200 Pts Higher; Optimism Over Covid Cases Helps

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By Peter Nurse   

Investing.com – U.S. stocks are seen opening higher Monday, rebounding after recent weakness on the back of positive Covid-19 news and encouraged by signs that Democratic lawmakers may be scaling down their plans to raise taxes.

At 7:15 AM ET (1115 GMT), the Dow Futures contract was up 200 points, or 0.6%, S&P 500 Futures traded 25 points, or 0.6%, higher, while Nasdaq 100 Futures climbed 80 points, or 0.5%.

Helping the tone Monday was the news that Covid-19 cases appeared to be declining across the country, with the 7-day average through Friday dropping to 136,000, from 157,000 at the end of August, according to the Centers for Disease Control and Prevention.   

The three major indices fell last week, with the Dow Jones Industrial Average dropping 2.2% and the S&P 500 falling 1.7%, both recording five straight days of losses for the first time since February. The Nasdaq Composite fell 1.6%, its worst week since July.

These losses may be relatively small given the gains the indices have enjoyed over the last year, but there are signs overall confidence may be weakening as central banks consider scaling back economic stimulus amid concerns over rising inflation – even as growth starts to moderate.

At the same time, global authorities appear to be flexing their muscles, be it Chinese regulators taking on their tech behemoths, the U.S. courts forcing Apple (NASDAQ:AAPL) to allow app developers to send users to other payment systems, or the U.S. Democrats proposing a series of levies on wealthy individuals and companies.

The economic data slate is largely empty Monday, with the main focus being on Tuesday’s release of consumer price inflation. In July, price increases slowed but remained at a 13-year high on a yearly basis, while producer prices recorded on Friday the biggest annual increase since records were first kept in November 2010. 

In corporate news, Uber (NYSE:UBER) will be in the spotlight after a Dutch court ruled that drivers are employees of the company and not independent contractors, while Live Nation (NYSE:LYV) has reached a new agreement to acquire Mexican concert promoter OCESA Entretenimiento for about $450 million, according to the Wall Street Journal.

Crude prices advanced Monday, posting a one-week high, with supply from the important U.S. Gulf of Mexico region still impacted by the damage from Hurricane Ida more than two weeks after the event.

The Organization of Petroleum Exporting Countries is expected later Monday to release its latest monthly assessment of worldwide conditions, with the global growth of Covid-19 cases likely to weigh on their future demand prediction.

By 7:15 AM ET, U.S. crude futures traded 1% higher at $70.39 a barrel, while the Brent contract rose 0.7% to $73.46. Both contracts reached their highest level since Sept. 3 earlier in the session.

Additionally, gold futures rose 0.1% to $1,790.10/oz, while EUR/USD traded 0.3% lower at 1.1775.

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