By Peter Nurse
Investing.com - U.S. stocks are seen opening firmly higher Tuesday, continuing to rebound as investors reassess the perceived risks associated with the Omicron Covid variant.
At 7 AM ET (1200 GMT), the Dow Futures contract was up 355 points, or 1%, S&P 500 Futures traded 60 points, or 1.3%, higher and Nasdaq 100 Futures climbed 295 points, or 1.9%.
The major indices roared back on Monday, after last week’s hefty losses, after comments from public health officials indicated that illnesses associated with the Omicron variant of the Covid-19 virus may be less severe than the previous versions. That raises the tantalizing possibility of a variant that accelerates natural immunity to the disease without creating a fresh crisis in hospitals around the world.
The blue-chip Dow Jones Industrial Average gained nearly 650 points, or 1.9%, on Monday, one of its best days this year, while the broad-based S&P 500 jumped 1.2% and the Nasdaq Composite ended 0.9% higher.
Over the weekend, the White House’s chief medical advisor, Anthony Fauci, called the initial data on the variant “encouraging,” and this optimism is supporting the market in a week that is light in terms of major data and also a quiet spot on the earnings calendar.
Adding to the return of confidence has been the loosening of Chinese monetary policy, in the shape of China’s reserve ratio cut late on Monday.
In terms of corporate news, Intel (NASDAQ:INTC) traded sharply higher premarket after the chip giant announced plans to take its self-driving car unit Mobileye (F:0ME) public, probably in the middle of next year.
Intel will remain the majority owner of Mobileye, and the two companies will continue as strategic partners, a statement by the chipmaker said.
MongoDB (NASDAQ:MDB) will also be in focus after the database provider lifted its forecast for the third time in the year after strong growth in the August-October period.
Elsewhere, U.S. President Joe Biden and his Russian counterpart Vladimir Putin are due to speak later Tuesday in an attempt to defuse the tension on the Ukrainian border. A Russian invasion would likely lead to the U.S. and its European allies imposing sanctions targeting the country’s banking sector.
Crude prices rose Tuesday, adding to the previous session’s strong gains as worries over the impact of the omicron Covid variant on global demand eased.
Also, the chance of Iranian exports returning to the global market fell after Germany urged Iran on Monday to present realistic proposals in talks over its nuclear program. This suggests a nuclear deal is still a long way off.
Investors now await the release of the U.S. government’s Short-Term Energy Outlook at 12 PM ET, as well U.S. crude oil supply data from the American Petroleum Institute, at 4:30 PM ET.
By 7 AM ET, U.S. crude futures traded 3.3% higher at $71.88 a barrel, while the Brent contract rose 2.9% to $75.19. Both benchmarks posted gains of just under 5% on Monday.
Additionally, gold futures rose 0.2% to $1,783.05/oz, while EUR/USD traded 0.3% lower at 1.1256.