U.S. stock futures wobbled Monday as investors assessed the slowing pace of new coronavirus infections, potential complications surrounding fresh federal stimulus spending plans and escalating tensions with China.
Futures tied to the S&P 500 wavered between gains and losses, following a week in which the benchmark index advanced 2.5%. Overseas, the pan-continental Stoxx Europe 600 ticked up 0.4%. Most major Asian equity benchmarks rose by the close of trading, except for Hong Kong.
Investors are attempting to gauge whether steps taken by President Trump over the weekend to offer aid to American households will go into effect despite challenges from lawmakers. Questions have also risen over whether those measures can effectively alleviate the economic fallout of the coronavirus pandemic and lockdown measures.
Mr. Trump on Saturday directed the federal government to provide $300 a week in additional payments to the unemployed. That was one of four executive orders aimed at extending relief spending after the White House and lawmakers on either side of the aisle in Congress failed to reach an agreement on a broader stimulus package. The president's directives are already facing criticism for not offering sufficient aid, and for potentially breaching congressional spending authority.
"The legal basis for Trump to do much here with executive orders is shaky. He won't get far," said Holger Schmieding, chief economist at Berenberg Bank. Still, with the coming November elections, politicians are likely to work out a deal that offers aid to votes, he said. "It's highly likely to have a deal this week that extends support to the end of the year," Mr. Schmieding said.
The U.S. also reported its lowest number of new coronavirus cases in nearly a week, as new infections in some parts of the country trended down. Still, the country surpassed five million confirmed cases, with 13 states seeing an uptick in the number of new infections. Economists pointed to the slowing new case numbers as a signal that moderate measures might make it possible to contain the virus, without again crimping economic activity severely.
Market sentiment was briefly knocked by media reports that China's foreign ministry may impose fresh sanctions against Senators Ted Cruz and Marco Rubio as early as Monday. That would mark the latest barb exchanged between the two countries with relations deteriorating in recent months.
"I'm not surprised we're seeing yo-yo like moves at the moment reflecting short-term developments like the sanctions," said Ella Hoxha, senior investment manager at Pictet Asset Management.
The outcome from talks scheduled between top U.S. and Chinese officials on Aug. 15 about the phase-one trade deal are viewed as crucial by investors, she said. "That's more important for markets than the sanctions, which seem much more of a tit-for-tat diplomatic spat rather than something with deep economic implications."
Ahead of the opening bell in New York, shares in Simon Property Group rose over 4% in off-hours trading. The largest mall owner in the U.S. has been in talks with Amazon.com to take over space left by ailing department stores for its fulfillment centers.
In bond markets, the yield on the benchmark 10-year U.S. Treasury ticked down to 0.559%, from 0.562% Friday.
In Asia, Hong Kong's Hang Seng Index dropped 0.6% by the close of trading. Political tensions in the region continued to simmer as Jimmy Lai, the outspoken publisher of Hong Kong's widely read pro-democracy newspaper, was arrested Monday on suspicion of foreign collusion under a new national security law. That step marks an expansion of Beijing's crackdown on the former British colony.
Elsewhere, the Shanghai Composite Index climbed almost 0.8% by the end of the trading day, while South Korea's Kospi rose 1.5%.
In commodities, Brent crude, the international oil benchmark, rose 1.1% to $44.89 a barrel. Gold ticked up 0.7% to $2,042.90 a troy ounce.
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