The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the outbreak of the coronavirus disease (COVID-19) in New York City, U.S., April 26, 2020.
Jeenah Moon | Reuters
Stock futures opened flat in overnight trading on Monday as investors monitored the economic reopening amid widespread protests across the U.S. over police brutality.
The market rose slightly on the first day of June following back-to-back monthly gains. The Dow rose about 90 points on Monday after a 4.2% gain in May and a 11% rally in April. Meanwhile, the S&P 500 climbed about 0.3% after gaining 4.5% in May and 12.6% the month before.
Investors continued to focus on the progress of economic reopenings, bidding up shares of airlines, retailers and cruise line operators. However, many on Wall Street grew worried that the rising risks of the racial strife and U.S.-China tensions could reverse the market’s massive comeback.
“Good news on vaccines helped stocks in May, but US-China relations & civil unrest could steal the spotlight in June,” Lori Calvasina, RBC’s chief U.S. equity strategist, said in a note. “The S&P 500 remains highly news flow driven.”
New York Gov. Andrew Cuomo announced New York City will be under curfew Monday night starting at 11 p.m. and lasting until 5 a.m. Tuesday to curb protests. Many businesses including Target and Apple have temporarily closed stores as demonstrations turned violent in several cities across the country still recovering from the coronavirus crisis.
Meanwhile, China has asked state-owned firms to halt purchases of soybeans and pork from the U.S., Reuters reported Monday. The move came after President Donald Trump said he would take steps to revoke Hong Kong’s favored trade status, in response to a controversial new security law passed by China’s parliament that would effectively bar political protest in Hong Kong.
“The disconnect between stocks and the economy generated widespread concern among some investors,” Jeff Buchbinder, equity strategist for LPL Financial, said in a note. “At the same time, reopening optimism and massive stimulus overshadowed some concerns about a second wave of COVID-19 infections and increasing US-China tensions.”
As of Monday, the S&P 500 has bounced about 39% off its March low, sitting about 10% below its record high set in February.
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