Stock futures rose on Monday ahead of the holiday-shortened week as President Joe Biden announced that he would reappoint Jerome Powell to lead the Federal Reserve.
Futures on the Dow Jones Industrial Average gained 155 points, while the S&P 500 futures and Nasdaq 100 futures also both traded up by about 0.4%.
Tesla shares rallied, gaining more than 2% after CEO Elon Musk said the electric vehicle maker’s Model S Plaid could be launched in China by the spring of 2022.
In other early action, Moderna shares continued their upward momentum, rising 1.8% in premarket trading after the FDA last week cleared the company’s booster shot for all U.S. adults. The stock is up 14.1% over the past five sessions.
On the downside, Activision Blizzard dropped 1.4% following reports that CEO Bobby Kotick said he would consider resigning if he can’t fix the company’s culture. That news came following reports that Kotick was aware of sexual misconduct within the organization.
Stocks have a track record of posting gains in Thanksgiving week, which will potentially set the stage for a year-end Santa rally.
Since 1950, the last five trading days of November have been traditionally positive, according to Sam Stovall, chief investment strategist at CFRA. Meanwhile, there’s a two-thirds likelihood the market is up on the day before Thanksgiving Day and a 57% chance the day after the holiday, the strategist said.
One big market-moving event this week will be President Joe Biden’s nomination for the next Federal Reserve chief.
Biden is expected to announce his pick in the coming days, with current chairman Jerome Powell and Governor Lael Brainard considered the most likely candidates. Many expect a more dovish central bank if Brainard prevails, meaning it would take longer to tighten policies including raising interest rates.
“I do think in the shortened week, that is probably going to be the biggest driver of market action,” said Jeff Schulze, ClearBridge Investments investment strategist. “If Brainard is nominated as Fed chair, it wouldn’t be a surprise to me to see some near-term volatility. Usually, the market tests a Fed chair.”
The S&P 500 came off a winning week, up 0.3%, on the back of a slew of stellar earnings reports from big retailers and strong U.S. retail data. The tech-heavy Nasdaq Composite jumped 1.2% last week. The blue-chip Dow fell 1.3% during the period, however.
Month to date, the S&P 500 is up 2%, on track to post its second positive month in a row. The equity benchmark has gained more than 25% in 2021.
U.S. markets will be closed Thursday on Thanksgiving Day. The stock market closes early at 1 p.m. ET on Friday.
–CNBC’s Patti Domm contributed reporting.
