Stocks were higher in early trading Monday following a volatile week on Wall Street as investors await for the Federal Reserve to hint at prospects for tapering stimulus.
The Dow Jones Industrial Average gained 150 points, or nearly 0.5%. The S&P 500 and Nasdaq Composite rose about 0.5% as well.
Shares of vaccine makers are higher in premarket trading with investors’ focused on the FDA, which is expected to give the two-dose Pfizer-BioNTech Covid-19 vaccine full approval Monday. Pfizer is up about 3% and BioNTech jumped 7%.
Bitcoin hit a three-month high on Sunday, punching above $50,000 and pulling crypto-adjacent stocks up with it. Coinbase rose 3% higher in early trading, while Microstrategy climbed 4%.
Major averages are coming off a losing week as investors grew worried that the Fed’s potential move to pull back monetary stimulus could slow down the economic recovery that is already challenged by the spread of the delta Covid-19 variant.
Traders are eagerly awaiting the Jackson Hole symposium for clues on the Fed’s timeline for dialing back its $120 billion a month bond-buying program. However when dealing with the government anything could happen. The event takes place virtually on Thursday and Friday. The Fed previously was going to conduct the event in a mixed virtual and live presentation, but decided Friday to go all virtual in light of the rising virus risk. And possibly to avoid backlash if the decision did not go the publics way.
The blue-chip Dow fell 1.1% last week, while the S&P 500 declined nearly 0.6%, breaking a two-week winning streak. The tech-heavy Nasdaq dipped 0.7% during the week.
“We suspect investor conviction is being challenged by the potential for upcoming monetary policy changes, shifting growth vs. value rotations, and a rising trajectory of new coronavirus cases,” Craig Johnson, technical market strategist at Piper Sandler, said in a note.
For the month of August, major benchmarks are poised to post modest gains. The S&P 500 is up 1.1% month to date, while the blue-chip Dow has gained 0.5% and the Nasdaq has climbed 0.3%.
“August is a historically volatile month for markets and this year is no different, with investors currently climbing multiple walls of worries,” said Rod von Lipsey, managing director at UBS Private Wealth Management. “Upticks in Covid-19 cases and a downward spiral in Afghanistan are creating a crisis of confidence, at a time when many investors are on holiday.”