U.S. stock futures rose in overnight trading on Tuesday after a strong market rally as the Reddit trading frenzy continued to develop.
Dow futures rose 50 points. S&P 500 futures rose 0.4% and Nasdaq 100 futures rose 0.5%.
Strong profits from Amazon and Alphabet helped the future. Amazon reported an almost double profit on Wall Street. The stock move, however, was tempered by news that Jeff Bezos was stepping down as CEO.
Alphabet shares rose 6% after the close of trading after the tech giant posted 23% sales growth and beat earnings estimates.
Stocks rallied for the second time on Tuesday, with the Dow Jones Industrial Average gaining more than 475 points for its best day since November. Investors returned to buying stocks after the Reddit fueled action that rocked the markets last week. The Dow is up 2.35% this week.
The S&P 500 rose 1.4% and the Nasdaq Composite rose more than 1.5%.
After a meteoric, if seemingly synthetic, surge in GameStop over the past week from a brief press, stocks have seen more than 70% crater this week. Other Reddit trades have also returned to Earth due to trading restrictions imposed by major brokers.
“The best way to describe today’s stock market action is to reverse the Reddit revolution,” Jim Paulsen, chief investment strategist at Leuthold Group, told CNBC. “What happened to GameStop came down with GameStop.”
“From noon on January 28th to the end of January 29th, cyclics including technology were beaten while defensive sectors performed faster. For the past two days, and today in particular, it has been the other way around,” Paulsen added.
Investors are also overseeing negotiations in Washington on another stimulus package. President Joe Biden met with the ten Republican senators on Monday to discuss an alternative, smaller proposal to aid his $ 1.9 trillion package.
The winning season continues on Wednesday. AbbVie, Biogen, Boston Scientific, GlaxoSmithKline and Humana will be reporting before the opening bell.
Chipmaker Qualcomm, eBay, PayPal and Yum China reported gains after the market closed on Wednesday.
January private salary data is released by ADP at 8:15 a.m. on Wednesday. Economists polled by Dow Jones expect private sector jobs to grow by 50,000 in January, compared with the loss of 123,000 in December.
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