(Reuters) – Wall Street was set to jump on Tuesday after a record rise in May retail sales revived hopes of a swift post-pandemic economic rebound, with sentiment also lifted by data showing reduced COVID-19 death rates in a trial of a generic steroid drug.
A Commerce Department report showed overall retail receipts rose 17.7% last month as Americans resumed spending after weeks of lockdown although the rebound retraces only a fraction of the historic drops in March and April.
Department store operators Macy’s Inc, Kohl’s Corp and Nordstrom Inc surged between 11.5% and 14.6% in premarket trading.
Results from a UK-led trial showed giving low doses of the generic steroid drug dexamethasone to patients admitted to hospital with COVID-19 reduced death rates by around a third among those with the most severe cases of infection.
“Looking at this morning’s number in aggregate, this is another indicator that a V-shaped recovery could be more likely than we initially thought,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial Corp.
“A potential COVID-19 steroid treatment in the UK combined with record retail sales and news of additional stimulus has been met with unbridled optimism.”
U.S. stocks ended a volatile session higher on Monday as the Federal Reserve said it would start buying corporate bonds to infuse liquidity. A report overnight said the Trump administration was preparing a nearly $1 trillion infrastructure proposal.
Investors will keep a close watch on a live telecast of Fed Chair Jerome Powell’s two-day testimony before the Congress, which is expected to begin at 10 a.m. ET.
Powell’s remarks are set to come after the U.S. central bank issued a grim outlook last week, sparking a pullback in a stock market rally that has powered the Nasdaq to fresh record highs.
The benchmark S&P 500 index is now about 9% below its record high hit four months earlier after coming within 5% of that level early last week.
At 9:02 a.m. ET, Dow e-minis were up 905 points, or 3.51%. S&P 500 e-minis were up 86.25 points, or 2.81% and Nasdaq 100 e-minis were up 200.75 points, or 2.05%.
Shares from economically-sensitive industrial, financial and energy sectors climbed in premarket trading. Caterpillar Inc jumped 7.3% and Boeing Co climbed 8.9%, while lenders including Bank of America Corp and Citigroup Inc rose 5.5% and 6.3%.
Oil majors Exxon Mobil Corp added 5.1% and Chevron Corp 4.4%.
Eli Lilly and Co jumped 9.2% after its breast cancer therapy Verzenio met the main goal of reducing the risk of it returning in the early stages in a late-stage study.
Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur