Futures edge higher after pullback on Wall Street; Georgia runoffs in focus

FILE PHOTO: The front facade of the New York Stock Exchange (NYSE) is seen in New York, U.S., November 24, 2020. REUTERS/Brendan McDermid

(Reuters) – U.S. stock index futures inched higher on Tuesday following Wall Street’s grim start to the year as investors looked to twin Senate runoff elections in Georgia that would determine the balance of power in Washington.

A Democratic victory in both races could tip control of the Senate away from Republicans, potentially boosting the agenda of President-elect Joe Biden.

While a “blue sweep” of Congress could usher in greater fiscal stimulus to aid the coronavirus-ravaged economy, it could also pave the way for Biden to push through greater corporate regulation and higher taxes, hurting some areas of the market.

Latest polls from data website 538 here gave a slight edge to both Democratic candidates in their respective races.

The Cboe Volatility Index eased after closing at its highest level in two months in the prior session when Wall Street’s indexes dropped to two-week lows as investors braced for a “Blue Sweep”.

While the start of vaccine rollouts and massive monetary support powered the major U.S. stock indexes to record levels, the discovery of a more contagious strain of the coronavirus and the latest virus-related curbs have muddied the economic outlook.

A reading of ISM’s manufacturing sector PMI is expected to drift lower for a second straight month in December. The Federal Reserve’s minutes from its latest policy meeting as well as monthly employment report are also on tap this week.

At 06:19 a.m. ET, Dow E-minis were up 72 points, or 0.24%, S&P 500 E-minis were up 9.75 points, or 0.27%, and Nasdaq 100 E-minis were up 34.5 points, or 0.27%.

Chipmaker Micron Technology Inc rose 4% after Citigroup raised its rating on the stock to “buy” from “neutral”.

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