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Stock futures go negative after the S&P 500 record

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Tourists take a photo with the bull near the New York Stock Exchange.

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Futures contracts, which are pegged to major US stock indices, traded mixed-up early Friday after the S&P 500 closed at a record high and President Joe Biden signed landmark stimulus laws.

Dow futures added 52 points, which means a profit of a similar magnitude if regular trading resumes on Friday. Nasdaq 100 and S&P 500 futures were down 0.66% and 0.11%, respectively.

U.S. stocks climbed to record highs during Thursday’s regular session as the tech stocks rebound resumed and Biden’s $ 1.9 trillion Covid-19 bailout package became law. The S&P 500 jumped 1% to hit a new closing high, beating its previous February 16 record.

The relative laggard, the Dow Jones Industrial Average, hit 188.57 points after breaking more than 300 points to an intraday record at the start of the session.

“While we expect conditions to remain volatile, recent developments in three of the main market drivers – stimulus, pandemic news and inflation data – point to further uptrend in equity,” wrote Mark Haefele, chief investment officer, UBS Global Wealth Management .

“The incentive is much bigger than expected at the beginning of the year. Its provisions should also be a strong support for consumption and growth,” he added, referring to the incentive. “This coincidence adds to existing signs of pent-up demand from US consumers.”

While the S&P 500 hit a new closing record, the Nasdaq Composite posted the best profit of the day, up 2.5%. Moves that carried this index higher included a 4.7% pop on Tesla and gains of at least 3% on Apple, Facebook, Alphabet and Netflix.

The Nasdaq is fighting its way out of a 10% correction it suffered earlier this month and remains 5.48% below its own record set in February.

A rapid spike in bond yields put pressure on the tech-heavy index in early March as investors switched to economically sensitive, cyclical stocks. Large rate hikes can put undue pressure on high-growth technology stocks as they reduce the relative value of future earnings.

That trend appeared to be partially reversed on Thursday as bond yields calmed down. The Nasdaq is up 3.7% this week, outperforming both the S&P 500 and the Dow for the period. The 10-year government bond yield, which peaked at 1.6% this month, was last seen north of 1.53%.

On Thursday, there were ample signs that the U.S. economy could be poised for a healthy 2021 after Biden signed his highly anticipated $ 1.9 trillion coronavirus aid package. The plan will send direct payments of up to $ 1,400 to many Americans, and will also provide nearly $ 20 billion for Covid-19 vaccinations and $ 350 billion for state, local, and tribal government efforts.

Biden announced Thursday evening that he would instruct states to qualify all adults for the vaccine in his first prime-time address by May 1.

Investors also welcomed a slightly better-than-expected reading of weekly unemployment claims, which showed a decline in the number of first-time applicants for unemployment benefits.

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Katherine Clark