Stock futures fell on Tuesday, with tech shares set to lead the decline.
The pullback follows a strong start to May as investors on Monday piled into shares that would benefit the most from an economic reopening.
Futures on the Dow Jones Industrial Average lost 76 points. S&P 500 futures fell 0.5%. Futures for the tech-heavy Nasdaq-100 were the hardest hit, dropping 0.9%.
Futures on the S&P 500 were basically flat most of the morning before selling increased in tech stocks and Nasdaq futures.
Apple, Tesla and Alphabet were all down 1% and at their session lows in the premarket.
Countering that move were stocks rising on strong earnings. Pfizer shares rose 1% in premarket trading after posting quarterly results that beat expectations and raising its 2021 guidance. CVS Health shares jumped 3% after the pharmacy chain and insurance company also raised its guidance.
United States Steel moved 3% higher in premarket trading after Credit Suisse upgraded the stock to outperform from underperform, saying that the surge in prices for steel made it clear that the industry was in a “super cycle.”
The move in futures followed solid gains for the Dow on Monday. The 30-stock benchmark rallied more than 200 points, while the S&P 500 inched up 0.3%. Retail stocks led the market advance with Gap and Macy’s rallying more than 7%. Dillard’s rose nearly 10%, while Urban Outfitters and Kohl’s both gained more than 5%.
“Buying activity picked up within industrials, Boeing and Delta saw heavy trading activity as investors may be taking advantage of depressed pricing and banking on reopenings,” said Chris Larkin, managing director of trading and investing product at E-Trade Financial.
States continued to relax pandemic restrictions amid the vaccine rollout. New York Gov. Andrew Cuomo announced that most capacity restrictions will be lifted across New York, New Jersey and Connecticut, while 24-hour subway service will resume in New York City later this month.
Florida Gov. Ron DeSantis signed an executive order on Monday that immediately suspends the state’s remaining health restrictions.
The Dow and the S&P 500 just posted their consecutive months of gains, bringing their 2021 gains to more than 11% each.
“Many of the factors driving markets remain in place, including vaccine optimism, the economic reopening, and accelerating earnings, though inflation and valuation concerns remain,” said Mark Hackett, Nationwide’s chief of investment research.
Warren Buffett said Saturday that he is seeing “very substantial inflation” among Berkshire Hathaway’s collection of businesses amid the economic recovery.
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