US futures fell on Tuesday, signaling that major indices could breathe after signs of a rapid economic recovery led them to record highs.
S&P 500 futures fell 0.1% a day after the high-cap stock benchmark rose to its 17th close in 2021. Dow Jones Industrial Average Contracts, which Monday reached a new high for the 18th time this year also fell 0.1%. Futures for the technologically strong Nasdaq-100 were relatively flat.
Shares rose at the beginning of the second quarter amid optimism that government spending, vaccinations and easing restrictions are triggering a period of rapid economic growth. A number of data provided evidence that a recovery in activity and employment is underway a year after the pandemic hit the economy. Investors are betting that sectors such as banking and mining will benefit from reopening. Technological stocks also rose after sometimes faltering in the first quarter.
“It simply came to our notice then [economy] it just hit the accelerator, ”said Brian O’Reilly, head of market strategy for international funds Mediolanum. The recent rally shows signs of being broad and is not just focused on the economically sensitive sectors that suffered the most from the pandemic in 2020, he added. “We have certainly seen a moderation in the one-way bet, which was placed until mid-March.”
The Cboe Volatility Index, which measures expected fluctuations in the S&P 500 based on option prices, rose to 18.04. This is close to the lowest level since the pandemic began to shake markets at the end of February 2020.