By Caitlin Ostroff
U.S. stock futures climbed Tuesday, signaling that the major indexes could notch record highs in their first trading session after the Presidents Day holiday.
Futures tied to the S&P 500 rose 0.5%, and those linked to the Dow Jones Industrial Average advanced 0.7%. Both benchmarks closed Friday at all-time highs. Contracts tied to the technology-heavy Nasdaq-100 gained 0.4%.
Investors are focused on the prospects for additional fiscal stimulus spending and support from central banks to steer a broad economic recovery. House Democrats are preparing to stitch together a legislative version of President Biden's $1.9 trillion coronavirus relief proposal this week. Sentiment has also been buoyed by the rollout of vaccines and a drop in Covid-19 infection rates in many countries.
"The fiscal stimulus package is looking like it will be on the larger side," said Seema Shah, chief strategist at Principal Global Advisors. "The backdrop, if anything, has really improved. It has just firmed up what everyone was expecting."
Frigid temperatures across swaths of the U.S. have injected new momentum into the rally in energy markets. Natural-gas futures rose 5.6% to $3.07 per million British thermal units. Since natural gas is burned to generate electricity and heat, its price tends to rise during cold snaps. Analysts said production is also likely to be curtailed by the conditions.
Gasoline futures rose 5.2% to $1.78 a gallon. Several large refiners, which convert crude oil into usable fuels, have shut in response to the low temperatures, according to media reports.
Brent-crude futures, the benchmark in international energy markets, ticked down 0.3% on Tuesday. The price remained near its highest level since January 2020.
"This Arctic breeze is clearly increasing the demand for oil and heating in general. That clearly is something to watch," said Carsten Brzeski, ING Groep's global head of macro research.
Bitcoin prices notched a record high overnight, hitting $49,950, according to data from CoinDesk. The cryptocurrency has since pulled back slightly, and recently traded at $49,010.
Earnings season is set to continue, with CVS Health and Palantir Technologies scheduled to report quarterly results before the market opens. American International Group will release figures after the market closes.
"All the earnings being reported are generally a lot higher than most estimates," said Charles Hepworth, an investment director at GAM Investments.
Strong earnings and the start of the vaccine rollout has led investors to become more optimistic on the hardest-hit sectors of the pandemic, he said. "We're still stuck in this K-shaped recovery, where you have certain areas of the market doing well and others getting hammered, and now the market is starting to think everything is going to come back," Mr. Hepworth said.
In bond markets, the yield on the 10-year Treasury ticked up to 1.227%, from 1.199% Friday. Yields rise when prices fall.
Overseas, the pan-continental Stoxx Europe 600 edged up less than 0.1%.
In Asia, exchanges in mainland China were closed for the Lunar New Year holiday.
Hong Kong's Hang Seng Index rose 1.9% in the first day of trading after the holiday period, with energy and banking stocks leading gains. Australia's S&P/ASX 200 and South Korea's Kospi Composite added 0.7% and 0.5% respectively.
Japan's Nikkei 225 jumped 1.3% by the close of trading. Shares of Japanese technology conglomerate SoftBank Group surged 4.1% to 10,420 yen apiece, surpassing their previous closing high from the dot-com bubble.
--Chong Koh Ping contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
02-16-21 0451ET
