US Futures Moderately Pressured After Fresh Record Closings

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Key Takeaways

• Equity futures showing losses at the opening, Dow dips more than 150 points
• Delta spread threatens to undermine the economic recovery in the US and Europe

US Futures Moderately Pressured

US stock index futures were trading lower in pre-market activity on Tuesday after major averages ended Monday action mostly to the upside with the Dow and the S&P500 notching fresh record highs.

Futures contracts tied to the Dow Jones Industrial Average slipped more than 150 points, or roughly 0.45%, ahead of the opening bell in New York. S&P500 futures dipped about 15 points or 0.40%. Nasdaq futures dropped almost 40 points or around 0.25%.

Traders and investors on Monday were relatively uncertain about the course of the stock market. Throughout most of the day, the Dow Jones and the S&P500 floated in negative territory. Near the final hours of the session, market participants dived back into the risky asset class and managed to sustain their upside swing for yet another day.

The 30-stock Dow Jones and the broader S&P500 posted their fifth consecutive positive session, rising 0.31%, and 0.26%, respectively. Each of the major stock benchmarks hit a record close on Monday.

The Nasdaq Composite was negative during the session and ended the day in the red by 0.20%.

The broad-based S&P500 reached a historical milestone on Monday. Besides notching its 49^th record close for the year, the index has now doubled from its pandemic closing low on March 23, 2020. The achievement is the fastest doubling of an index since World War II.

Ahead in the day, investors will be monitoring the latest retail sales data. Economists expect a slight dip in the reading due to a slowdown in July, underlined by the spread of the Delta variant.

Federal Reserve Chairman Jerome Powell will be hosting a town hall called “Conversation with the Chair: A Virtual Teacher Town Hall Meeting”. Investors will be watching for any clues about movement or changes in monetary policy.

Delta Spread Undermines Economic Recovery

In overseas markets today, European bourses are trading relatively muted and slightly lower. The pan-continental Stoxx Europe 600 floats below its closing level from a day earlier. On Monday, the region-wide benchmark snapped a streak of 10 consecutive days of gains, the longest uninterrupted winnings stretch since 2006. All major European markets were also in the red for the session yesterday.

Delta concerns mounted once again in Europe and the US after weak China data showed the nation’s retail sales were up 8.5% on annual basis for July. The number was short of the 11.5% jump expected by analysts polled by Reuters. Chinese authorities have been restricting business and social activity as a measure to prevent the quick spread of another Covid-19 wave.

Goldman Sachs intervened with a letter to assuage investors’ fears that the slowdown could transfer to the Western countries. “Rising COVID case growth is likely fueling the slowdown seen in China and the decline in manufacturing sentiment, but the economic impact — at least in the US and Europe — is unlikely to be big,” the investment firm said Monday in a note to clients.

In the digital asset market on Tuesday, major cryptocurrencies are pressured under their opening levels as a quiet trading session unfolds. Bitcoin is now gravitating below the $46,000 mark, while Ether keeps slightly above $3,100 per coin.