Dow futures rise 150 points after Biden sticks with Powell to lead the Fed

Stock futures rose on Monday ahead of the holiday-shortened week as President Joe Biden announced that he would reappoint Jerome Powell to lead the Federal Reserve.

Futures on the Dow Jones Industrial Average gained 155 points, while the S&P 500 futures and Nasdaq 100 futures both traded up by about 0.4%.

Powell, a former private equity executive, was nominated to the Fed Board a decade ago by President Barack Obama. He ascended to the top job under President Donald Trump, and lead a landmark re-evaluation of the Fed’s inflation targeting framework during the Covid crisis.

Lael Brainard, who was seen as Powell’s main competition and was favored by progressives in Washington, is being nominated for a vice chair position at the central bank.

Bank stocks and Treasury yields moved higher after the White House announced the Fed decision. Shares of JPMorgan and Morgan Stanley rose nearly 2% in premarket trading.

Elsewhere, Tesla shares rallied, gaining more than 2% after CEO Elon Musk said the electric vehicle maker’s Model S Plaid could be launched in China by the spring of 2022.

Moderna shares continued their upward momentum, rising 2.4% in premarket trading after the FDA last week cleared the company’s booster shot for all U.S. adults. The stock is up 14.1% over the past five sessions.

On the downside, Activision Blizzard dropped 1.4% following reports that CEO Bobby Kotick said he would consider resigning if he can’t fix the company’s culture. That news came following reports that Kotick was aware of sexual misconduct within the organization.

Covid news also weighed on market sentiment, as German Chancellor Angela Merkel warned that the country was seeing a spike of the virus.

Stocks have a track record of posting gains in Thanksgiving week, which will potentially set the stage for a year-end Santa rally.

Since 1950, the last five trading days of November have been traditionally positive, according to Sam Stovall, chief investment strategist at CFRA. Meanwhile, there’s a two-thirds likelihood the market is up on the day before Thanksgiving Day and a 57% chance the day after the holiday, the strategist said.

The S&P 500 came off a winning week, up 0.3%, on the back of a slew of stellar earnings reports from big retailers and strong U.S. retail data. The tech-heavy Nasdaq Composite jumped 1.2% last week. The blue-chip Dow fell 1.3% during the period, however.

Month to date, the S&P 500 is up 2%, on track to post its second positive month in a row. The equity benchmark has gained more than 25% in 2021.

U.S. markets will be closed Thursday on Thanksgiving Day. The stock market closes early at 1 p.m. ET on Friday.

—CNBC’s Patti Domm contributed reporting.