Futures gain on stimulus hopes; Fed meet in focus

FILE PHOTO: The U.S. flag is seen on a building on Wall St. in the financial district in New York, U.S., November 24, 2020. REUTERS/Brendan McDermid

(Reuters) – U.S. stock index futures rose on Tuesday as progress toward a massive government spending bill and COVID-19 relief measures kept spirits high, while investors awaited new economic cues from the Federal Reserve’s final meeting of the year.

Talks in Congress were underway late on Monday to agree on a bill to avert a government shutdown, with Democrat and Republican leaders appearing more upbeat about including a fresh round of coronavirus aid, the first new relief measure since April.

Markets have moved in tandem with news on a relief bill, which is expected to further offset the economic impact of the virus outbreak and keep liquidity high.

The Fed is expected to maintain interest rates at near-zero during its two-day meeting starting later on Tuesday, and signal it will stay there for years to come. The recent coronavirus vaccine roll-out is also expected to improve the bank’s 2021 outlook.

Increased cash and ultra-low lending rates have seen investors flocking to stocks for returns through the COVID-19 pandemic.

U.S. S&P 500 E-minis were up 20.5 points, or 0.56%, at 06:30 a.m. ET. Dow E-minis were up 154 points, or 0.52%, while Nasdaq 100 E-minis were up 49.25 points, or 0.40%.

Uncertainty over fresh stimulus and a spike in the U.S. death toll pushed the S&P 500 to a four-day losing streak on Monday, despite optimism over the launch of a nationwide vaccination program.

Among individual movers, Apple Inc rose more than 1% in premarket trade after a report said it plans to increase iPhone production by 30% in the first half of 2021.

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