Stock futures fell into trading overnight on Sunday as the market is expected to close November with historically strong gains.
The futures on the Dow Jones Industrial Average fell 172 points. Meanwhile, the S&P 500 futures and Nasdaq 100 futures traded slightly lower.
Futures fell after Reuters reported the Trump administration was weighing the blacklist of leading Chinese chip maker SMIC and national offshore oil and gas producer CNOOC. The move would restrict access to American investors and escalate tensions with China before President-elect Joe Biden takes office.
Despite the overnight weakness, major equity averages are heading for a strong month. The blue chip Dow is up 12.9% so far this month, at the pace of its best monthly performance since January 1987, as promising vaccine developments added confidence in a smooth economic reopening. The S&P 500 and Nasdaq were up 11.3% and 11.9% respectively in November, both on track to see their largest monthly gains since April.
Cyclical sectors, these most economically sensitive groups, led the November market rally amid a string of positive vaccine news. Energy, the biggest loser of 2020, is up 33.8% this month, while Financials, Industrials and Commodities are up at least 13% over the period.
Small caps got a rift this month as investors piled into seedy names of value. The Russell 2000 gained 20.6% so far in November, heading for its best month ever.
"This rally was notable as the growth-to-value rotation continued to gain momentum, although the negative news flow of Covid cases increased across the country and lockdowns were re-imposed in different parts of the country," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
The market has had a record-breaking holiday week with the 30-share Dow surpassing the 30,000 milestone for the first time. The benchmark has since fallen below the threshold. The S&P 500 and the Nasdaq both closed at new record highs on Friday.
Still, investors continue to monitor the coronavirus pandemic, which has killed more than 266,000 people in the U.S. Dr. Anthony Fauci, the nation's leading infectious disease expert, said on Sunday that the U.S. is entering a difficult phase of the pandemic where restrictions and restrictions on travel advisories are required.
California's Los Angeles county issued a new stay at home order Friday as cases increased in the country's most populous county. Meanwhile, New York City public schools will reopen on December 7th.
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