U.S. stock futures rise as the Feds and House make progress on stimulus deal

U.S. stock futures went higher in Tuesday early morning trade following the progress made on the stimulus deal.

The Dow Jones Industrial futures contract gained 79 points, while futures contracts for the S&P 500 and the Nasdaq 100 slightly traded on positive grounds.

Negotiations for the next stimulus package have been ongoing—back and forth – for months as the first stimulus package under the CARES Act expired on July 31. Since then, unemployment claims increased and job growth slowed, but consumer spending continued to increase slowly.

The stock market saw a huge decline during Monday’s trading session. The Dow shed 410 points, while the S&P 500 and Nasdaq Composite both fell a little over 1.6%. The eleven sectors of the S&P also finished in the red. This decline marked the fourth down day for the Dow and S&P 500, and the fifth-straight negative session for Nasdaq.

Meanwhile, after trading hours on Monday, shares of Dow component Intel rose nearly 1.2%. This followed after South Korean chipmaker SK Hynix announced its plan to buy Intel’s NAND business for $9 billion.

U.S. government debt prices were also lower on Tuesday morning, as investors closely monitor the discussions between the House and Treasury, and the possibility of a new stimulus package ahead of the upcoming presidential election next month.

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Monday afternoon, continued their discussions on the next stimulus package. A Pelosi spokesman Drew Hammil said both parties continue to “narrow their differences” and Tuesday was the deadline to reach a final agreement before the November 3 presidential election.

As the deadline fast approaches, chief investment strategists at Delos Capital Advisors Andrew Smith said failure to meet the stimulus package deadline may not send the economy into a recession but will slow down smooth recovery.

“We don’t believe that the new business cycle necessarily will be deterred if a stimulus deal doesn’t get done, but we do believe, if a stimulus deal on the fiscal side gets done, that will help propel the economy into that new business cycle a lot quicker than what we expect so far,” said Smith.

In addition to relief bills that were barely considered in the Republican-controlled Senate, House Democrats have passed two other relief bills. Later this week, the House will vote on a $500 billion targeted relief package.

As lawmakers continue negotiations, the White House said it has moved up its previous stimulus proposal to $1.9 trillion from $1.8 trillion, still below the Democrat’s proposed $2.2 trillion.

According to Hammil via Twitter, House Speaker Pelosi says she hopes for “clarity” by the end of Tuesday on whether or not conclusions on a stimulus bill will be made. There is also the possibility of Tuesday trading session being volatile around corporate earnings.

Some companies like Procter & Gamble are set to release results before the bell, while others including Snap and Netflix will release results after the market closes.