The Dow is set to jump more than 300 points to start December following its best month in 3 decades

U.S. stock futures jumped on Tuesday, indicating the Dow Jones Industrial average will start December continuing its historic rally from November.

Dow futures surged 349 points, or 1.2%. The move implied a higher open of 395 points. S&P 500 futures rose 1.1%. Nasdaq 100 futures gained 0.9%.

The Dow rallied 11.8% in November, posting its best one-month performance since January 1987. The S&P 500 and Nasdaq Composite rose 10.8% and 11.8%, respectively, for their strongest monthly advances since April. After November’s gain, the S&P 500 is up 12.1% fro 2020.

“December looks like it will be a very strong finish for 2020,” wrote Tom Lee of Fundstrat Global Advisors, who cited data that showed during bull markets when the S&P 500 was up more than 10% through November for the year, it always added to that gain in December.

The data “confirms our view that strong markets finish strong,” said Lee.  

November’s rally came amid a slew of positive coronavirus vaccine news, which lifted hope of a strong economic recovery. In the latest development on that front, Pfizer and BioNTech applied to the European Medicines Agency for conditional marketing authorization of their coronavirus vaccine, potentially enabling the vaccine to be used in Europe before the end of 2020.

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin are speaking before Congress this week. Powell called the U.S. economic outlook “extraordinarily uncertain” in prepared remarks to be delivered Tuesday.

“The rise in new COVID-19 cases, both here and abroad, is concerning and could prove challenging for the next few months,” Powell said. “A full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”

Tesla’s shares popped 4% in premarket trading after S&P Dow Jones Indices said the electric-car maker will be added to the S&P 500 on Dec. 21 in a single step despite its large size. The index provider had considered adding the $500 billion stock in multiple phases.

November’s gains were led by value stocks that hinge on an economic comeback. The iShares Russell 1000 Value ETF (IWD) rallied 13.4% for the month, and outpaced its growth counterpart, the iShares Russell 1000 Growth ETF (IWF) by more than 3 percentage points.

“Vaccine news has further buoyed spirits with several therapeutic/preventative lights now at the end of the pandemic tunnel being another set of positive data points,” wrote Tobias Levkovich, chief U.S. equity strategist at Citi. However, he added investors may be getting too complacent about the risks the market still faces.

At this point, the market is either “anticipating an even stronger 2021 profits outlook possibly tied to rapid inoculation-driven recovery and continued corporate cost containment, or the S&P 500 may be ahead of itself in the near term, particularly when considering no new short-term fiscal stimulus and the impact of second wave outbreaks,” Levkovich said.

The gains have come even with a resurgence in coronavirus cases as investors look ahead to a vaccine-driven recovery. Data compiled by Johns Hopkins University shows that more than 13 million Covid-19 cases have been confirmed in the U.S. along with over 266,000 deaths. In New York, Gov. Andrew Cuomo said the state was implementing emergency hospital measures as cases continue to rise.