Futures bounce after worst session for S&P 500, Dow in two weeks

(Reuters) – U.S. stock index futures recovered on Wednesday after President Donald Trump’s abrupt call to end stimulus talks sent Wall Street tumbling in the previous session, while shares of Levis Strauss surged following a surprise quarterly profit.

Trump broke off negotiations with Democrats on more economic aid in a tweet on Tuesday, and promised a major stimulus bill after he wins the Nov. 3 election.

The announcement sparked the worst session for the S&P 500 and the Dow in two weeks, while airlines (DJUSAR) sank 3% as the move appeared to scuttle $25 billion in new bailout for the industry.

Trump later urged Congress to immediately approve the package. Shares of Delta Air Lines Inc (N:DAL), American Airlines Group Inc (O:AAL), United Airlines Holdings Inc (O:UAL) and JetBlue Airways Corp (O:JBLU) jumped between 2.4% and 6.9% in premarket trading.

“(The halt in stimulus talks) is unlikely to be the catalyst for a significant sell-off as most market participants were not anticipating that a deal will be reached ahead of the election anyway,” said Milan Cutkovic, market analyst at Axi Corp.

“Should there be no stimulus package announced shortly after the election, investors could get increasingly nervous about the economic recovery losing momentum.”

Signs that lawmakers were negotiating a new round of fiscal aid had fueled a broad rally in U.S. stocks on Monday. Federal Reserve Chair Jerome Powell on Tuesday also called for more help for businesses and households to keep a nascent economic recovery from faltering.

All eyes later in the day will be on the only debate between Vice President Mike Pence and Democratic challenger Kamala Harris, which comes less than a week after Trump said he had contracted COVID-19 amid a White House outbreak that has infected numerous high-profile Republicans.

At 6:48 a.m. ET, Dow e-minis <1YMcv1> were up 150 points, or 0.54%, S&P 500 e-minis were up 15.25 points, or 0.45%, and Nasdaq 100 e-minis were up 42 points, or 0.37%.

Levi Strauss & Co (N:LEVI) jumped 10.7% and was on course to open at a four-month high as it said it planned to open new stores, in contrast to analysts’ projections for it take a hit from coronavirus-driven store closures. The company also reported a profit for the third quarter, defying expectations of a quarterly loss.

Shares of apparel retailer Gap Inc (N:GPS) rose 3.3%.

Boeing Co (N:BA) gained 1.8% after the Federal Aviation Administration issued a draft report on revised training procedures for the planemaker’s 737 MAX, a key milestone to the plane’s eventual ungrounding.