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Stimulus, dovish Fed bets set to lift Wall St ahead of earnings rush

Credit: REUTERS/BRENDAN MCDERMID

Wall Street was set for a higher open on Monday after a two-day slide, as bets on more stimulus to revive a battered domestic economy lifted the mood ahead of a week packed with quarterly corporate updates from companies including Boeing and Apple.

By Medha Singh and Devik Jain

July 27 (Reuters) - Wall Street was set for a higher open on Monday after a two-day slide, as bets on more stimulus to revive a battered domestic economy lifted the mood ahead of a week packed with quarterly corporate updates from companies including Boeing and Apple.

Still, safe haven assets were in demand with gold prices notching a record high amid concerns over Sino-U.S. tensions, escalating coronavirus cases in southern and western U.S. states and an unexpected rise in U.S. jobless claims last week. GOL/

Trillions of dollars in fiscal and monetary stimulus have been pivotal in bringing the S&P 500 to within 5% of its record high hit in February.

Expectations are running low for any major announcements at a two-day Federal Reserve meeting this week, but analysts expect policymakers to lay the groundwork for more action in September or in the fourth quarter.

Investors are also keeping a close watch on progress over the next round of government aid ahead of enhanced unemployment benefits set to expire on Friday.

U.S. Senate Republicans on Monday are expected to unveil a $1 trillion coronavirus aid package hammered out with the White House, which will now be negotiated with Democrats.

"The market is looking at this as a nice bridge of one to one-and-a-half trillion dollars to get us to the period in which we either have a treatment, or more likely a full vaccine toward the end of the year," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

Earnings reports will also be a major focus this week, with 189 S&P 500 companies expected to report results, including Boeing Co BA.N, Pfizer Inc PFE.N, Facebook Inc FB.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O.

At 8:15 a.m. ET, Dow e-minis 1YMcv1 were up 123 points, or 0.47%. S&P 500 e-minis EScv1 were up 17.5 points, or 0.55% and Nasdaq 100 e-minis NQcv1 were up 101.5 points, or 0.97%.

Investors will get the first glimpse of the second-quarter U.S. GDP report on Thursday, which is likely to show the economy contracted by 34% in the three-month period.

Moderna Inc MRNA.O jumped 8.9% premarket as it started a U.S. government-backed late-stage trial to assess its COVID-19 vaccine candidate in about 30,000 adults.

Hasbro Inc HAS.O dropped 8.5% after the toymaker missed estimates for quarterly earnings and revenue, hit by production shutdowns due to coronavirus lockdowns.

(Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)

((Medha.Singh@thomsonreuters.com; within U.S. +1646 223 8780, outside U.S. +91 80 6749 1130; Twitter: https://twitter.com/medhasinghs))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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