Stock futures hold steady in overnight trading after a strong tech rally on Wall Street

Stock futures were flat in overnight trading on Monday after a strong performance in technology shares pushed the S&P 500 in positive territory for the year. 

Futures on the Dow Jones Industrial Average dipped about 10 points, while the S&P 500 and the Nasdaq 100 futures were little changed.

The overnight action followed a strong performance in technology shares that pushed the Nasdaq up 2.5%. Amazon led the gains in popular tech names with a 7.9% jump on Monday, its best day since December 2018. The Nasdaq 100, which consists of the 100 biggest non-financial companies in the composite, popped 2.8% for its biggest one-day gain since April.

IBM gained 4.7% in extended trading after the company reported better-than-expected second-quarter earnings. Notably, IBM improved gross margins in three of its five units in the past quarter.

“We expect robust growth-company balance sheets and low interest rates to support higher valuations for growth stocks than for value stocks in the near term,” Ken Johnson, Wells Fargo’s investment strategy analyst, said in a note on Monday.

The market also cheered a slew of positive news on the vaccine front. Pfizer and BioNTech reported early positive data on a joint coronavirus vaccine. Meanwhile, another candidate from Oxford University and AstraZeneca showed a positive immune response in an early trial. 

With Monday’s gains on Wall Street, the S&P 500 turned green for 2020 with a 0.6% gain on the year, while the Nasdaq has risen 20% this year. The 30-stock Dow lagged, however, down 6.5% for 2020.

Investors are also monitoring the talks in Washington on the next coronavirus relief bill. Lawmakers face pressure to pass legislation before the end of the month, when the $600 per week federal unemployment insurance benefit is set to expire. 

“I believe the stock market would benefit from news of a stimulus package coming to fruition,” Kristina Hooper, Invesco’s chief global market strategist, said in a note on Monday. “In times like this, despite a massive and rising budget deficit for the US, I believe big government is likely to be good news for the stock market.”

More companies will report quarterly earnings on Wednesday. Coca-Cola and Philip Morris are set to drop results before the bell, while United Airlines will report after the close.