U.S. stock futures rose early Thursday as Wall Street looked to build on a solid March following President Joe Biden’s infrastructure plan in place.
Futures linked to the Dow Jones Industrial Average indicated an opening gain of around 50 points. The S&P 500 futures rose 0.3% and the Nasdaq 100 futures rose 0.9%.
The move into the future came after Biden presented his billion dollar infrastructure proposal. The plan includes spending on roads and bridges and upgrading the green energy and water systems.
This is the second big spurt of spending from Biden’s presidency after signing a $ 1.9 trillion law on relief and incentives on March 11.
“With the American rescue plan, we are facing immediate emergencies. Now it is time for reconstruction,” said Biden on Wednesday.
Microsoft shares rose 1.2% in premarket trading after it was revealed that the software giant will ship more than 120,000 devices based on its HoloLens augmented reality headset to the US Army. The contract is valued at $ 21.9 billion over a 10-year period.
According to a report in the Wall Street Journal, Micron Technology and Western Digital are set to examine a deal to buy Japanese semiconductor company Kioxia for about $ 30 billion. Micron stock was up 3.8% in the pre-IPO news, while Western Digital was up about 0.5%.
Micron Technology and Western Digital are individually examining a possible deal for Kioxia that could value the Japanese semiconductor company at around $ 30 billion, the Wall Street Journal reported on Wednesday, citing people familiar with the matter.
Tech stocks outperformed industrial and construction companies on Wednesday, despite details of the plan’s introduction being known. This is a possible sign that the increase in funding has been priced in by the market. Recovery and cyclical stocks have done well since the start of the year as investors became more bullish on government spending and Covid vaccinations.
Bank of America equity strategist Savita Subramanian told CNBC’s Fast Money that the market may still have to digest the tax hikes included in the plan, creating potential headwinds for stocks.
“I think the market is factoring in the good news about infrastructure … I don’t think the market necessarily priced in the negatives. So we’re going to pay for it,” Subramanian said.
Wall Street ended March on a positive day for broader markets. The S&P 500 rose 0.36% on Wednesday, breaking a two-day losing streak, while the tech-heavy Nasdaq Composite rose 1.5%. These indices ended the month up 4.2% and 0.4% respectively.
The 30-share Dow fell slightly but ended the month up more than 6%.
On the earnings side, Micron’s shares rose in expanded trading after the chipmaker beat expectations for its second-quarter income statement.
Thursday morning will bring a huge amount of business news, with weekly jobless claims data from the Department of Labor and manufacturing and construction reports to be released. Economists polled by Dow Jones estimate that 674,000 initial jobless claims were made in the past week, a slight decrease from the previous week.