Dow Heading for Record Highs, Tesla Tumbles—and What Else Is Happening in the Stock Market Today

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Wall Street was headed for a strong start Monday.

Angela Weiss/AFP via Getty Images

The stock market was rising to new highs Monday, as investors remained optimistic about economic growth and were encouraged by Congress passing the $550 billion infrastructure bill late Friday.

Futures for the Dow Jones Industrial Average indicated an open 100 points higher, after the index climbed 203 points Friday to close at 36,327. Futures for the S&P 500 signaled a similar start, with the Nasdaq on track to open slightly lower. All three indexes ended last week at all-time highs.

Overseas, Hong Kong’s Hang Seng Index fell 0.4% and the pan-European Stoxx 600 was flat.

Markets have taken in stride last week’s decision by the Federal Reserve to begin slowing, or tapering, its program of monthly bond purchases, which add liquidity to markets. The central bank has indicated that it will continue watching the labor market as a key indicator of economic strength as it begins tapering, and Friday’s jobs report was cheered by investors as a “Goldilocks” result. The U.S. added more jobs in October than expected, but likely not enough to prompt a change to the pace of tapering or a rate increase from the Fed earlier than expected.

“There’ll be less central bank action this week but a potential area to keep an eye on will be any developments on Fed appointments, with Chair Powell’s current four-year term coming to an end in early February. President Biden said last Tuesday that he would announce his nominees ‘fairly quickly,’” said Jim Reid, a strategist at Deutsche Bank.

“On the U.S. political front, the House passed the $550 billion bipartisan infrastructure bill late on Friday night,” Reid added. “Outlays are slated for the next 10 years, and the Congressional Budget Office estimated the bill will add $256 billion to the Federal budget deficit over that time.”

Here are two stocks on the move Monday

Tesla (TSLA) was down 7% in U.S. premarket trading after CEO Elon Musk indicated on Twitter that he would sell a 10% stake in the electric-car company.

Richemont (CFR.Switzerland) rose 3.4% in Zurich amid news that activist hedge fund Third Point had built a stake in the luxury-goods company.