Michael Nagle | Bloomberg | Getty Images
Futures contracts rose multiple times overnight on Sunday night, suggesting that major US stock indices could trade at or near records when regular trading opened in New York.
Dow futures gained 98 points while those linked to the S&P 500 rose 0.25%. Nasdaq 100 futures were up 0.23%.
The moves in extended trading came after last week's trading ended positive and both the Dow Jones Industrial Average and S&P 500 hit new all-time highs on Friday.
Last week the Dow was up 2.7% and the S&P 500 was up 1.2%. Despite a 0.9% rally in the last session of the week, the Nasdaq Composite lost 1.5% over the same period.
The late week optimism came despite a far weaker-than-expected job report in April that showed U.S. employers completed 266,000 net payrolls in the last month. Economists polled by Dow Jones had expected 1 million new entrants.
Mike Wilson, chief US equities strategist at Morgan Stanley, noted that traders appear to have already priced in a robust economic reopening as Covid-19 cases declined. Any news that could threaten this narrative could quickly affect where portfolio managers allocate cash
"We're watching expectations versus reality as the reopening market is now at a good price. Cumulative retail sales are above what it would have been before COVID trends – suggesting some expectation risk related to the pent-up demand narrative suggesting, "Wilson wrote over the weekend.
"The job market is less loose than usual at this point in the cycle," he added. "We recommend moving the quality curve up and creating a more defensive balance as the market shifts towards mid-cycle leadership."
A ransomware attack forced the closure of the largest US fuel pipeline over the weekend. The Colonial Pipeline, which operates a 5,500-mile system, said it was forced to stop transporting fuel from the Gulf Coast to the New York subway region on Friday because "certain systems were taken offline to serve the Contain the threat ".
The final impact of the attack on fuel prices remains unclear, and analysts say the length of the shutdown will have the biggest impact.
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