Stock Futures Lower After Dow Close, S&P At Record High

U.S. stock index futures fell overnight Monday after the Dow and S&P closed at record highs amid optimism about the economic reopening.

Futures contracts linked to the Dow Jones slipped 53 points. S&P 500 futures were down 0.13%, while Nasdaq 100 futures were slightly negative.

On Monday, during normal trading hours, the Dow Jones jumped 174 points, reaching its 21st intraday high of the year and its 14th record-breaking closing high of 2021. It was also the seventh consecutive positive session of the average. 30 stocks – the longest daily winning streak since August.

The S&P 500, meanwhile, gained 0.64% for its fifth consecutive positive session. The benchmark index hit its 16th intraday high of the year and its 13th closing record.

The Nasdaq Composite was the relative outperformer on Monday, gaining 1.05% and recouping some of its recent losses.

Shares of big tech companies and economic reopening games like airlines have driven major averages higher as the coronavirus vaccine rollout continues.

“The distribution of COVID-19 vaccines brings us closer to a fully reopened economy and is possibly the most important factor in assessing the prospects for economic growth for 2021,” LPL Financial strategists noted. “We expect interest rates to disappear as a threat to the markets,” the company added.

The 10-year Treasury yield was trading around 1.6% on Monday, after hitting its highest level in more than a year on Friday. The recent surge in bond yields has resulted in a rotation out of growth stocks as future cash flows for companies start to look less attractive relative to other assets.

“After an outperformance cycle of around 14 years, the dominance of growth over value peaked in the fall of 2020,” said Keith Lerner, chief market strategist at Truist. “We still see more upside in value versus growth over the next 12 months given the value’s dramatic long-term underperformance and the US economy poised to experience the best growth in more than 35 years old. “

On Tuesday, Lennar and CrowdStrike are among the companies expected to report their earnings. February retail sales data is also expected to be released, in addition to builder sentiment data from the National Association of Home Builders.

Meanwhile, the Federal Reserve will kick off its two-day meeting on Tuesday, followed by a statement and briefing from President Jerome Powell on Wednesday.