US Stock Market Futures: Dow Jones, S&P 500, Nasdaq Rally, Point To Tuesday Opening Gains

U.S. stock futures started higher Monday evening on the back of the gains made in regular trade and rallied sharply early Tuesday morning on a news report that President Donald Trump was drawing up a $1 trillion infrastructure plan.

Futures on the Dow Jones Industrial Average rose more than 503 points, suggesting an opening gain of more than 550 points in Tuesday's regular trading. S&P 500 and Nasdaq futures also rose.

The three major U.S. stock indexes ended Monday's trading higher, after diving in opening trades on fears of a coronavirus second wave. But they reversed course dramatically at the announcement of the start of the Federal Reserve’s corporate bond buying program.

Bloomberg reported citing sources faimiliar with the plan that the majority of the mony of the Trump administration's infrastructure proposal would see funds reserved for 5G wireless infrastructure and rural broadband. Still a majority of the money would be set aside for roads and bridges. The questions on Congress and the administration reaching a deal on the plan remain, and even then the bulk of the money will take years to be spent.

Earlier on Monday, the Fed said it will start purchasing corporate bonds as part of its emergency lending program. The annoucement expanded its previously announced Secondary Market Corporate Credit Facility that had included only purchases of exchange-traded funds. The annoucement was strong enough to help the markets break through the negative sentiment created by the fears of a second wave of the coronavirus.

Shares of Facebook, Amazon, Netflix and Apple were among the biggest gainers, rising by more than 1% each. Other gainers were JPMorgan Chase, Citigroup, Wells Fargo and Bank of America, which rose by at least 0.8%.

The Fed move is seen as an attempt to reassure investors that it will continue to support credit markets. Fed chair Jerome Powell is set to speak before Congress on Tuesday and Wednesday.

“I think what they’re trying to get away from is the perception that they’re favoring one company or one industry over another so they try to spread it out,” Yahoo Finance reported Kathy Jones, chief fixed income strategist at Charles Schwab, as saying.