Traders work on the floor of the New York Stock Exchange.
NYSE
US stock index futures advanced in overnight trading after the main averages ended Tuesday’s session in the red.
Futures contracts linked to the Dow Jones Industrial Average hit 27 points. S&P 500 futures were up 0.1%, while Nasdaq 100 futures were up 0.16%.
The major averages retreated from record highs to close in negative territory during regular trading. The Dow slipped 97 points, or 0.3%, thus breaking a two-day winning streak. The S&P hit an all-time high, but pulled back during afternoon trading, eventually closing 0.1% lower for the first negative session in four. The Nasdaq Composite was down 0.05% and also had a three-day winning streak.
“There are many reasons to be excited about the coming months, and we are generally optimistic for this year,” said Lindsey Bell, lead investment strategist at Ally Invest. “The momentum of stocks is strong, no doubt about that. But the market may be ready to take a breather when investors digest all the good news, determine how much of it is priced in and weigh it up against uncertain risks like inflation,” she added. .
Strong economic data – including the March jobs report that practically exceeds expectations – has fueled stock gains in recent sessions. All three major averages come from their fourth straight quarter of earnings as Covid-19’s economic recovery accelerates.
The International Monetary Fund raised its 2021 growth outlook for the global economy to 6% on Tuesday, from the 5.5% forecast in January. The organization said that “a way out of this health and economic crisis is increasingly visible.” However, the IMF warned of “daunting challenges” given the varied pace of vaccine introduction around the world.
“From a positioning standpoint, we still view stocks as relatively attractive,” said Keith Lerner, chief market strategist at Truist. “While we expect periodic setbacks, US equities have risen 85% of the time during economic expansions and valuations remain attractive compared to fixed income.”
Rising returns have scared investors of late, leading to a rotation of growth towards value-oriented parts of the market. On Tuesday, the yield on 10-year Treasury paper fell 7 basis points to 1.65%.
The Federal Open Market Committee is publishing minutes of its March meeting on Wednesday, where the central bank chose to leave interest rates unchanged. The minutes could give investors a sense of when the Fed might hike interest rates.