US stocks opened lower on Tuesday, suggesting that tech stocks will put pressure on major indices after the open bell.
The broad S&P 500 fell 0.5% after the index rose 0.3% on Monday, despite declines in tech giant stocks. On Tuesday, the Dow Jones Industrial Average fell 0.3% and the Nasdaq-100 fell 0.9%.
Major indices hold close to record levels as investors compare strong economic data and robust corporate earnings with fears of inflation and rising coronavirus cases in parts of the world. Some money managers say that improved economic outlook and business profits are built into stock valuations.
“The market has already priced prices during a strong recovery and an overpriced earnings season, but that was still not enough for the indices to rise significantly,” said Sophie Chardon, cross-asset strategist at Lombard Odier. “The market is now focused on the next steps, especially politics. The next step will be to see how the Fed changes its outlook for monetary policy. ”
The improving economic picture is prompting some investors to bet on the companies that will benefit the most from the recovery. This is pushing energy and banking stocks higher, while tech stocks have slowed.
“Rotational trading has resumed and will continue to gain momentum over the next few weeks,” said Florent Pochon, head of cross-asset strategy at French bank Natixis.…
“As long as central banks remain peaceful, and you combine that with the resumption of the economy, this should be the ideal dynamic for stocks.”
Pfizer shares are up 1% ahead of the first bell. The pharmaceutical giant reported higher profits, thanks in part to sales of the Covid-19 vaccine. CVS Health gained more than 2% after canceling its earnings forecast and reporting higher earnings for the quarter.
Under Armor was down nearly 2% after agreeing to settle an undisclosed regulatory complaint about the withdrawal of forward orders from future quarters.
T-Mobile US and Lyft earnings reports will be released after the markets close.
Consumers and a new round of stimulus money pushed demand for US imports to a record high in March, further widening the trade deficit.
The Commerce Department said Tuesday that the foreign trade deficit in goods and services widened 5.6% from the previous month to a seasonally adjusted $ 74.4 billion in March.
US factory order data, scheduled for 10am ET, is likely to show orders rebounded in March from the previous month.
The yield on US government bonds has declined for the third day in a row. The yield on the 10-year Treasury bond fell to 1.597% from 1.606% on Monday. The yield on bonds falls as prices rise.
Brent crude, the international benchmark for crude, rose 1.3% to $ 68.42 a barrel amid optimism over a recovery in demand in the US and Europe.
Abroad, the pan-continental Stoxx Europe 600 Index fell 0.7%.
In terms of individual shares, shares in France’s Dassault Aviation jumped more than 4% after the deal to sell fighters to Egypt. Pandora rose 6% after a Danish jeweler reported high profit margins and revised its forecast.
In Hong Kong, the Hang Seng Index rose 0.7% by the close. Markets in Japan and mainland China were closed on public holidays.
Write to Will Horner, [email protected]
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