Stock futures pause following rally on vaccine hopes and economies reopening

Powell and Treasury Secretary Steven Mnuchin are scheduled to testify to Congress about measures taken to support the economy

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U.S. equity futures are trading lower after being higher overnight on optimism about a potential vaccine for the coronavirus and as states reopen for business.

The major futures indexes are indicating a decline of 0.5 percent when Wall Street begins trading on Tuesday.

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Investors are hoping that a working vaccine for COVID-19 can be developed. Massachusetts-based Moderna saw its stock jump 20 percent on Monday as an experimental vaccine showed early promise.

Investors were also encouraged by remarks over the weekend from Federal Reserve Chair Jerome Powell, who expressed optimism that the U.S. economy could begin to recover in the second half of the year. Once the outbreak has been contained, he said, the economy should be able to rebound “substantially.”

Powell and Treasury Secretary Steven Mnuchin are scheduled to appear before the Senate Banking, Housing, and Urban Affairs committee. The hearing is the first oversight session on the $2 trillion federal relief package approved in early March.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27173.96+358.52+1.34%
SP500S&P 5003298.46+51.87+1.60%
I:COMPNASDAQ COMPOSITE INDEX10913.561787+241.30+2.26%

The S&P 500 climbed 3.2 percent, its best day since early April. The Dow Jones Industrial Average surged 3.9 percent and the Nasdaq composite rose 2.4 percent.

In Asian markets on Tuesday, Japan's Nikkei added 1.5 percent, Hong Kong's Hang Seng gained 1.9 percent and China's Shanghai Composite edged up 0.8 percent.

Unemployment claims in Britain jumped 69 percent in April, as the COVID-19 pandemic took hold and hit the labor market, U.K. authorities said Tuesday. The Office of National Statistics says jobless claims surged by 856,000 to 2.1 million in April as compared to the month before.

In Europe, London's FTSE slipped 0.6 percent, Germany's DAX declined 0.7 percent and France's CAC fell 1.1 percent.

Benchmark U.S. crude oil added 55 cents to $32.37 a barrel. It jumped 8.1 percent to settle at $31.82 a barrel Monday. Brent crude, the international standard, is lower by 16 cents to $34.67 a barrel.

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Wall Street is hoping that the reopening of businesses and the relaxation of stay-at-home mandates continue without any major setbacks, paving the way for corporate profits to bounce back.

The Associated Press contributed to this article.