Stock Futures Rise, Putting S&P 500 on Course for New Record

Stocks have powered higher in recent trading sessions, putting the volatility sparked by swings in GameStop and other individual stocks in the rearview mirror. Investors are focusing on the prospect for a new batch of government spending. They say that could boost growth at a time when large companies are reporting robust profits but the broader economic outlook is patchy.

Democrats took a series of votes last week unlocking a process called reconciliation, which will allow the party to approve President Biden’s $1.9 trillion relief plan without Republican support in the Senate. House lawmakers are aiming to finalize and vote on a relief bill before the end of February.

The combination of strong quarterly earnings reports from some of the biggest American companies and the possibility of more relief for the economy has given markets a shot in the arm, according to Daniel Morris, chief market strategist at BNP Paribas Asset Management.

“It’s like your birthday and Christmas on the same day, and the markets are all happy,” said Mr. Morris.

Another round of stimulus spending in the U.S., a net importer, would also be a boon for overseas stock markets, according to Mr. Morris. “If you’ve got your growth motors of growth in the U.S. and China doing very well this year, that helps everyone,” he said.

Markets have also been buoyed by an upbeat set of earnings for the holiday quarter from large U.S. companies. Toy maker

Hasbro

is due to report ahead of the opening bell Monday. Commercial real-estate firm

Simon Property Group

and games company

Take-Two Interactive Software

will follow after markets close.

Of the 295 companies on the S&P 500 that had reported by early Monday, 81{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} had beaten analysts’ expectations for earnings growth, according to FactSet.

Oil markets continued to rally, pushing Brent-crude futures above $60 a barrel for the first time since the start of the pandemic in January 2020. The international energy benchmark rose 1.4{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} to $60.14 a barrel. Futures for West Texas Intermediate, the main grade of U.S. crude, rose 1.3{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} to $57.57 a barrel, extending an advance driven by shrinking supplies of crude.

In another sign of growing optimism among investors, the yield on 10-year Treasury notes rose to 1.2{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c}, from 1.168{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} Friday. Yields, which rise as bond prices fall, typically gain when money managers become more bullish about the outlook for growth and inflation.

Treasury Secretary

Janet Yellen

told CNN on Sunday that the U.S. could return to full employment next year if lawmakers pass Mr. Biden’s stimulus package.

Democrats are still debating who should be eligible for $1,400 direct checks and whether they can pass a $15 minimum wage as part of the pandemic-related stimulus package. Many Republicans have criticized Mr. Biden’s plan as too broad and expensive after Congress approved a $900 billion relief plan in December.

Stocks advanced in overseas markets. Shares of technology and basic-resources companies led gains in Europe, pushing the pan-continental Stoxx Europe 600 up 0.3{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c}.

Among individual European stocks,

Dialog Semiconductor

jumped 16{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} after the U.K.-based manufacturer agreed to be bought by Japan’s

Renesas Electronics

in a deal that would value the company at around €4.9 billion ($5.9 billion).

Rolls-Royce

fell 2.5{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} after proposing a two-week summer closure of its civil aerospace unit.

In Asia, the Shanghai Composite Index ended 1{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} higher. The Nikkei 225 rose 2.1{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} by the close after Nikkei Asia reported that Japan will consider lifting a coronavirus state of emergency in some prefectures ahead of a new deadline.

SoftBank Group

shares climbed over 4{a3b37e57a53f84d6443a5356ab02984f87900b4dee9193a01d6bf48d204ad87c} in Tokyo after the giant technology investor rode markets to a $11 billion quarterly profit, largely on the back of investment gains.

Write to Joe Wallace at [email protected]