Traders on the floor of the New York Stock Exchange.
Source: NYSE
US stock index futures were lower during Tuesday’s early trading after the Dow and S&P 500 closed at record highs during Monday’s regular trading.
Futures contracts pegged to the Dow Jones Industrial Average fell 182 points, or 0.5%. S&P 500 futures lost 0.4% and Nasdaq 100 futures lost 0.4%.
Dow member Home Depot fell more than 4% in early trading after it posted second quarter results, hurting futures. While quarterly earnings exceeded estimates, sales in the same store rose 4.5% during the reporting period, below the consensus estimate of 5% of analysts surveyed by StreetAccount. In the United States, sales in the same stores only increased 3.4%.
The move in the S&P 500 during Monday’s session was particularly noteworthy as the benchmark index has doubled since its pandemic closing low on March 23, 2020. This is the fastest doubling of the bull market since World War II, according to calculations by CNBC.
The closely watched retail sales data will be released Tuesday by the Census Bureau, with the street expecting readings to slow down in July as the Delta variant spreads. Economists polled by Dow Jones are calling for a 0.3% decline for the past month after June values showed a surprising 0.6% increase.
Walmart results are also on deck for Tuesday before the market opens. Target, Lowe’s, and Macy’s are among the names reporting later in the week. Walmart stocks were a little lower prior to the report.
The Dow and S&P 500 posted their fifth consecutive positive price on Monday, rising 0.31% and 0.26%, respectively. Each made up early losses, making both intraday and closing all-time highs. However, the Nasdaq Composite lost 0.2% and closed in the red.
Stocks have rebounded from their pandemic lows at a rapid pace, and some on Wall Street are seeing further gains in sight.
“We remain bullish on equities (especially cyclicals / value) thanks to a strong earnings season, signs of diminishing risk from the delta variant and a normalization of the bond-equity correlation,” JPMorgan wrote in a customer announcement on Monday.
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Monday’s action came from China despite disappointing economic data. The country’s retail sales rose 8.5% year-over-year in July, below Reuters’ expected 11.5% increase.
Goldman Sachs noted that the impact would likely be localized.
“The soaring growth in COVID cases is likely to fuel the slowdown in China and the decline in manufacturing sentiment, but the economic impact – in the US and Europe at least – is unlikely to be large,” the company said on Monday a message to customers.
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