Long-term US stocks fell on Tuesday, suggesting that major indices may break after closing on records.
S&P 500 futures fell 0.1% less after the benchmark posted its eighth all-time high in 2021 on Monday. Futures for the technology-focused Nasdaq-100 also fell 0.21%, while contracts for the Dow Jones industrial average fell 0.2%.
Investors said the markets are taking a breather as a result of a significant advance in stocks and commodities. The recent rally was fueled by expectations of a new dose of stimulus spending in the US, which could add a boost to the economic recovery. This helped reduce turbulence expectations in US stocks, reducing the Cboe volatility index this week to less than 22, after the spread rose to more than 37 at the end of January.
“Very small reduced movements are a symptom of low volatility,” said Trevor Greetham, head of multi-sector at the British investment firm Royal London Asset Management. “Low and falling volatility is a phenomenon of the bull market. You have quiet days. ”
Expectations for the economy to revive this year have led money managers to bet that stocks will continue to rise further, driven by sectors such as energy, banks and consumer companies that are sensitive to growth.