U.S. stock-index futures on Monday were set to climb amid fresh hope of cures for the COVID-19 pandemic and a flurry of potential and announced deals over the weekend, including reports that Oracle may be forging a partnership with TikTok, the popular China-owned social media platform.
How are equity benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, +0.94% YMU20, +0.92% were climbing 272 points, or 1%, at 27,765, those for the S&P 500 index ES00, +1.23% ESU20, +1.22% were advancing 42.70 points at 3,366, a gain of 1.3%, while Nasdaq-100 futures NQ00, +1.40% NQU20, +1.40% rose 167.50 points, or 1.5%, at 11,215.75.
Equities ended Friday trade with the Dow DJIA, +0.47% posting a weekly loss of 1.7%, while the S&P 500 SPX, +0.05% fell 2.5% and the Nasdaq Composite Index COMP, -0.60% dropping 4.1%, to mark its worst weekly drop since the period ended March 20, according to Dow Jones Market Data. Markets were closed Monday for Labor Day.
What’s driving the market?
Equities on Wall Street looked buoyant to start the week as investors drew optimism from a number of public-health and corporate announcements that were being taken as a positive, after a turbulent stretch of trading last week that saw the Nasdaq Composite post its steepest weekly decline since the height of the pandemic-driven selloff in March.
Notably, reports that the AstraZeneca PLC AZN, +1.24% said over the weekend that clinical trials for its experimental coronavirus vaccine resumed after trials were paused due to an unexplained illness contracted by one of the participants who was given the vaccine. The restart of the trial for the COVID-19 remedy may offer some optimism for the bulls to start the week.
“There are still plenty of uncertainties, and developing an effective vaccine is a long-term process,” wrote Milan Cutkovic, market analyst at AxiCorp. “However, investors are reacting positively to every progress made in the fight against COVID-19,” the analyst noted.
In addition to the AstraZeneca report, Pfizer Inc.’s PFE, +1.17% CEO Albert Bourla in an interview with CBS News’ “Face the Nation,” over the weekend said that the pharmaceutical giant should know if its own experimental COVID-19 vaccine works by the end of October — and if approved, it could be distributed in the U.S. by the end of the year.
“The market is moving up on several deals along with renewed hopes of a vaccine as Astra -Zeneca restarts trials and Pfizer’s CEO suggest a vaccine may be ready by year end,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities, in a Monday research note.
Indeed, a flourish of deal activity was also being digested as shares of Oracle Corp. ORCL, -0.57% jumped after it has reportedly been named a strategic partner for he U.S. operations of TikTok, according to the Wall Street Journal, citing people familiar. Such a deal would see Oracle beat Microsoft Corp., which also was seen in negotiations for a deal to own or operate ByteDance-owned TikTok.
An agreement to link up TikTok with a U.S. company would come amid rising tensions between America and China, with President Donald Trump threatening repeatedly to shut down TikTok in the U.S. if it isn’t sold to an American company by Sept. 15.
Elsewhere on the tech seen, chip maker Nvidia Corp. NVDA, -1.19% was seen nearing a deal to buy British chip-designer Arm Holdings for more than $40 billion from SoftBank Group Corp. and drugmaker Gilead Sciences GILD, +2.86% struck a deal to acquire Immunomedics IMMU, +0.76% and its breast-cancer drug Trodelvy for $21 billion, the Journal reported.