Dow Jones Industrial Average futures were higher in overnight trading on Sunday, although Covid-19 cases in the US and abroad increased.
Dow-pegged futures contracts rose 112 points, returning 0.38%. S&P 500 futures rose 0.32% while Nasdaq 100 futures rose 0.34%.
"Stocks are trading this week on lockdown concerns and rising cases, but could see a spike in early December as optimism about a stop-gap stimulus near term increases," said Shannon Saccocia, chief investment officer, Boston Private. "Overall, the back and forth between tech stocks and cyclicals is likely to continue for the next few weeks, and we could have some tough days when economic data is released that reflects the deterioration in consumer spending we are currently witnessing."
All three major averages ended Friday's session lower, while the Dow and S&P 500 also fell 0.73% and 0.77%, respectively, for the first negative week in three weeks. The Nasdaq Composite gained 0.22% this week, marking its second consecutive week of gains.
The decline fell as Covid-19 cases continued to rise. The US reported a record increase of more than 195,500 new cases on Friday. Public health officials have warned that Thanksgiving celebrations on Thursday could further exacerbate the outbreak.
The jump on Friday brings the 7-day average of new cases to over 167,600, an increase of almost 20% compared to a week. This comes from a CNBC analysis of the data compiled by Johns Hopkins University. The 7-day average of new cases in 43 states and the District of Columbia is up at least 5% from the week, according to Hopkins data.
The spike has resulted in coronavirus-related restrictions in some places. On Thursday, California Governor Gavin Newsom issued a "Limited Stay at Home Order" to a majority of the state's residents, which means that unnecessary work and gatherings will cease between 10:00 pm and 10:00 pm. and 5 a.m. move followed the decision by New York City Mayor Bill de Blasio to close the country's largest school system
Such measures are "likely to result in negative growth in the first quarter," JPMorgan economists said Friday. The company downgraded its first quarter GDP outlook to a 1% decline, the first on Wall Street to forecast negative GDP in the first quarter of 2021.
A disagreement between the Treasury Department and the Federal Reserve over continuing to fund some of the emergency programs launched as part of the Covid-19 outbreak also weighed on markets last week.
However, the mood has been kept in check by positive developments regarding the treatment and prevention of Covid-19. On Saturday, the Food and Drug Administration issued an emergency permit on Saturday for Regeneron treatment with Covid-19 antibodies, the experimental therapy given to President Donald Trump. Meanwhile, Pfizer and BioNTech filed with the FDA on Friday for emergency approval for their coronavirus vaccine with a 95% effectiveness rate.
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