US stock futures fell on Tuesday, suggesting large indices could take a breather after signs of a rapid economic recovery led to a record high.
The futures contract linked to the S&P 500 fell 0.1%, a day after the benchmark of large-cap stocks rose to its 17th all-time high of 2021. Contracts for the Dow Jones industrial average, which fell on Monday reached a new high for the 18th time this year, also slipped 0.1%. The futures contract for the technology-heavy Nasdaq-100 index was relatively low.
Inventories jumped at the start of the second quarter amid optimism that government spending, vaccinations and the easing of restrictions would trigger rapid economic growth. A series of data provided evidence that a boom in operations and leasing was underway, a year after the pandemic put the economy on hold. Investors are betting that sectors such as banking and mining will benefit from the reopening. Technology stocks also climbed after sometimes faltering in the first quarter.
‘It looks like the US [economy] has just hit the accelerator, ”said Brian O’Reilly, head of marketing for Mediolanum International Funds. The recent rally shows signs that it is broad and is not just concentrated in economically sensitive sectors that suffered the most from the pandemic in 2020, he added. “We definitely saw a moderation in the one-way bet that took place until maybe mid-March.”
The Cboe Volatility Index, which measures the expected swing in the S&P 500 based on option prices, rose to 18.04. This is almost the lowest level since the start of the pandemic at the end of February 2020.