US stock futures fell slightly on Tuesday, indicating that major indices could take a breather after signs of a rapid economic recovery have propelled them to record highs.
Futures pegged to the S&P 500 fell 0.1% a day after the benchmark meter of large cap stocks rose to its 17th all-time high in 2021. Contracts for the Dow Jones Industrial Average, which hit a new peak for the 18th time on Monday year also decreased 0.1%. Futures for the technology-heavy Nasdaq-100 index were relatively flat.
Shares rallied at the start of the second quarter on optimism that government spending, vaccinations and relaxation of restrictions are triggering a period of rapid economic growth. A series of data has provided evidence that a recovery in activity and hiring is underway a year after the pandemic slowed the economy. Investors are betting that sectors such as banking and mining will benefit from the reopening. Technology stocks are also up after occasionally faltering in the first quarter.
“It looks like the US. [economy] has just hit the accelerator, ”said Brian O’Reilly, head of market strategy at Mediolanum International Funds. The recent rally is showing signs of being broad, and is not just concentrated in economically sensitive sectors most affected by the 2020 pandemic, he added. “We’ve certainly seen a moderation in the one-way bet placed until maybe mid-March.”
The Cboe Volatility Index, which measures expected swings in the S&P 500 based on option prices, rose slightly to 18.04. That’s nearly the lowest level since before the pandemic started to hit the markets in late February 2020.