Stock futures rose as the overnight session kicked off on Tuesday, extending earlier gains.
The three major indexes ended higher for a second straight session on Tuesday, and the Dow posted its best single-session gain since November. The rally came alongside a precipitous decline in shares of some of the stocks that had been highly popularized on the Reddit forum r/wallstreetbets last week, including GameStop (GME), which more than halved on Tuesday to $60 per share, and AMC Entertainment (AMC), which sank by more than 40%.
Shares of mega-cap tech stocks advanced overnight, helping buoy the broader market. Amazon’s stock (AMZN) rose about 1%, as investors digested the company’s record quarterly results alongside the announcement that CEO Jeff Bezos would be stepping down from his role later this year, with Amazon Web Services chief Andy Jassy set to replace him. And shares of peer Big Tech giant Alphabet (GOOG, GOOGL) increased 7% after reporting fourth-quarter advertising revenue that rebounded strongly from earlier in 2020.
Even amid this week’s gains, some strategists have adopted a more cautious view on equities, which have marched higher against a backdrop of rising speculative investing and an ongoing pandemic.
“I’m a bit concerned that we are due for some sort of digestion of gains,” Sam Stovall, CFRA Equity Research Strategist, told Yahoo Finance on Tuesday. Still, however, he maintained his year-end price target of 4,080 for the S&P 500. And most strategists on Wall Street have echoed the view that stocks will ultimately end 2021 higher.
Others also noted that the apparent euphoria in markets may warrant some pause.
“One thing that keeps the rallies healthy is when you have a degree of fear in the market. And when you look at how the activity has moved to this point with Wall Street Bets … it shows that there is just a lack of concern, a lack of fear that investors of all kinds can essentially move with impunity,” Jeff Yastine, WealthPress senior investment strategist, told Yahoo Finance. “And just my instinct at times like that … is to draw back a bit and say, maybe you shouldn’t get so comfortable.”
On Wednesday, earnings season will roll on, and another batch of economic data will be released, offering possible new catalysts for the markets. Companies including Qualcomm (QCOM), eBay (EBAY), PayPal (PYPL) and GrubHub (GRUB) are scheduled to report quarterly results after market close. And ADP will release its closely watched report on private payrolls Wednesday morning, which is expected to show a modest gain in employment for January after a decline in December.
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6:14 p.m. ET Tuesday: Stock futures open higher
Here’s where markets were trading Tuesday evening as overnight trading kicked off:
S&P 500 futures (ES=F): 3,829.25, up 11 points or 0.29%
Dow futures (YM=F): 30,607.00, up 21 points or 0.07%
Nasdaq futures (NQ=F): 13,495.5, up 46.5 points or 0.35%
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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