U.S. stock futures rose on Sunday night as traders assessed a sharp market rotation that led to a mixed weekly performance last week.
Dow Jones Industrial Average futures were up by 101 points, or 0.3%. S&P 500 futures traded 0.5% higher and Nasdaq 100 futures advanced 0.6%.
The S&P 500 posted a record closing high on Friday and notched a one-week gain of 2.2%. The Dow rallied more than 4% last week and briefly hit an intraday record last week. The Nasdaq Composite lagged, however, sliding 0.6%.
Those moves came as traders piled into beaten-down value names at the expense of high-flying growth stocks amid positive vaccine news. The iShares Russell 1000 Value exchange-traded fund (IWD) rallied 5.7% last week while its growth counterpart, the iShares Russell 1000 Growth ETF (IWF) slid 1.2%.
Pfizer and BioNTech said last week that their coronavirus vaccine candidate was more than 90% effective preventing Covid-19 participants in a late-stage trial. The news sparked hope for an economic recovery, thus making value stocks such as United Airlines and Carnival Corp more attractive. United and Carnival rallied 12.4% and 15.9%, respectively, last week.
"The announcement of an effective Covid-19 vaccine by Pfizer/BioNTech last week was so important that we almost forget that there has just been a US presidential election," TS Lombard analysts Steven Blitz and Andrea Andrea Cicione wrote in a note.
"The vaccine turns what could have been a prolonged crisis into something closer to a natural disaster (large shock, swift recovery)," they said. "Without an effective vaccine, current EPS consensus expectations (pointing to a return to trend by the end of next year) would be on the optimistic side. But with one, they may actually come to pass."
To be sure, the number of coronavirus cases are still rising, thus threatening the prospects of a swift economic recovery.
More than 11 million Covid-19 infections have been confirmed in the U.S., according to data from Johns Hopkins University. Data from the COVID Tracking Project also showed that a record of more than 68,500 people in the U.S. are hospitalized with the coronavirus.
Dan Russo, chief market strategist at Chaikin Analytics, thinks the market can weather this latest spike in coronavirus cases, however.
"it seems that investors are more focused on vaccine news and are willing to look past the near-term spike in cases," he said in a post. "If this becomes a cause for concern for investors, it will become apparent on the charts and risk management will take over."
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.