Traders work on the floor of the New York Stock Exchange.
US stock index futures advanced during overnight trading after the biggest averages ended Tuesday’s session in red.
Futures contracts tied to the Dow Jones Industrial Average scored 27 points. The S&P 500 futures rose 0.1
The largest averages pulled back from record highs to close in negative territory during regular trading. The Dow slipped 97 points, or 0.3%, breaking a two-day winning streak. S&P hit a record high, but withdrew during afternoon trading, eventually closing 0.1% lower for its first negative session in four. The Nasdaq Composite fell 0.05% and also snapped up a three-day winning streak.
“There are many reasons to be excited for the coming months, and we are generally optimistic for this year,” said Lindsey Bell, chief investment strategist at Ally Invest. “Equity momentum is strong, no doubt about it. But the market may be ready to take a break as investors digest all the good news, determine how much is priced and weigh it against uncertain risks such as inflation,” she added. . .
Strong economic data – including March job reports that easily meet expectations – has pushed up stock growth in recent sessions. All three major averages come out of their fourth straight quarter gains as the economic recovery from Covid-19 accelerates.
The International Monetary Fund on Tuesday raised its 2021 growth outlook for the global economy to 6%, up from January’s forecast of 5.5%. The organization said that “a way out of this health and economic crisis is becoming more and more visible.” However, the IMF warned of “scary challenges” given the varying pace of vaccine rollout around the world.
“From a positioning standpoint, we still see stocks as attractive on a relative basis,” noted Keith Lerner, chief marketing strategist at Truist. “Although we expect periodic setbacks, US equities have risen 85% of the time during economic expansions and valuations remain attractive relative to fixed income.”
Rising interest rates have terrified investors recently and have created a rotation out of growth and into value-oriented areas of the market. On Tuesday, the 10-year government return fell by 7 basis points to 1.65%.
The Federal Open Market Committee publishes the minutes of its March meeting, in which the central bank chose to leave interest rates unchanged on Wednesday. The protocols could give investors an idea of when the Fed may raise interest rates.