U.S. stock-index futures were little changed, after erasing earlier gains as a slump in crude prices sapped some momentum from investors’ surging appetite for riskier assets.
December contracts on the S&P 500 Index added less than 0.1 percent to 2,162.25 at 8:26 a.m. in New York, trimming an advance of as much as 0.6 percent as crude sank after Iran raised output. The underlying equity benchmark closed little changed on Friday after a four-day gain pushed it to the biggest weekly jump since 2014. Futures on the Dow Jones Industrial Average rose 41 points, or 0.2 percent, to 18,828 today, after a second straight record close for the cash index. West Texas Intermediate crude futures lost 1.7 percent.
Investors on Monday assessed a stronger dollar and declines in oil, while a global debt selloff intensified. Stocks have outperformed bonds since Donald Trump’s election win, on speculation his pledge to spend more on infrastructure will trigger interest-rate hikes amid a pickup in growth and inflation. Equities had their biggest inflows in 17 weeks as bonds saw redemptions, for their largest gap in 12 months, a Bank of America Corp. report on Thursday showed.
“There’s a lot of re-positioning going on in the market rather than the whole market rolling over, with the sectors expected to do well under Trump outshining those which should fare worse,” said Jasper Lawler, a London-based analyst at CMC Markets Plc. “We are starting to see a reallocation according to the fiscal policy.”
The election win has divided the stock market into winners and losers based on speculation about how policies under the new government will impact those industries. Banks and drugmakers have rallied on optimism a Republican-controlled Congress will ease regulatory oversight, while so-called bond proxy groups such as utilities and real-estate shares declined.
Traders are pricing in an 90 percent chance the Federal Reserve will increase borrowing costs next month. Reports on retail sales and industrial production later this week will offer investors more clues on the strength of the economy.
The S&P 500 is within 1.2 percent of a record last reached in August, and on track for its best annual advance since 2014. Small caps have also climbed since the election, with the Russell 2000 Index surging 10 percent last week, its strongest in almost five years.
Steelmakers gained in early New York trading on Trump’s promise to boost infrastructure spending. U.S. Steel Corp., the country’s second-largest producer of the metal, and AK Steel Holding Corp. advanced at least 5 percent.
Some stocks were also active on deal news. Harman International Industries Inc. jumped 26 percent after Samsung Electronics Co. agreed to pay $8 billion to buy the maker of audio and video systems for cars. Mentor Graphics Corp. soared 19 percent after Siemens AG agreed to buy the company for $4.5 billion.
As the earnings season winds down, Home Depot Inc., Cisco Systems Inc., Gap Inc. and Wal-Mart Stores Inc. are among those reporting this week. Of the S&P 500 members that have already released results, 56 percent beat sales expectations and 76 percent exceeded profit forecasts. Analysts forecast a profit increase of 2.7 percent for the benchmark’s members in the July-September period, snapping five straight quarters of declines.