U.S. stock futures fell on Tuesday, signaling that major indices may take a sigh after signs of a rapid economic recovery have led them to record highs.
Futures contracts linked to the S&P 500 fell 0.1%, a day after the benchmark stock index reached its 17th closing high in 2021. Contracts for the Dow Jones Industrial Average, which on Monday reached a new peak for the 18th time this year, also fell 0.1%. The futures of the high-tech Nasdaq-100 index were relatively stable.
Stocks skyrocketed early in the second quarter amid optimism that government spending, vaccines and easing restrictions are triggering a spurt of rapid economic growth. A series of data provided evidence that a recovery in activity and hiring is taking place a year after the pandemic has stalled the economy. Investors are betting that sectors such as banking and mining will benefit from the reopening. Technology stocks also rose after some fluctuations in the first quarter.
“It looks like the USA [economy] just stepped on the gas, ”said Brian O’Reilly, head of market strategy at Mediolanum International Funds. The recent hike shows signs of being broad, and is not just focused on economically sensitive sectors that suffered the most from the pandemic in 2020, he added. “We certainly saw a moderation in the unilateral bet that was being made until perhaps mid-March.”
The Cboe volatility index, which measures the expected fluctuations in the S&P 500 based on option prices, rose to 18.04. This is close to its lowest level since before the pandemic began to shake markets in late February 2020.