Key Takeaways:
US stock futures tumbled Tuesday, with S&P 500 E-mini contracts falling 1% and Nasdaq 100 futures sliding 1.9%, extending a tech-led selloff ahead of key inflation data. Dow Jones futures declined 0.3%.
"Anything AI- and tech-related is still an area of focus for retail traders. They're just not as active in individual stocks as they have been in the past," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "Earnings have been the most important underlying support for the markets."
The declines follow a session Monday where the S&P 500 fell 0.37% and the Nasdaq Composite dropped 1.32%, while the Dow Jones Industrial Average bucked the trend with a 0.29% gain. Communication services led the selloff, falling 3.83%, followed by consumer discretionary stocks down 2.33%. Real estate gained 1.38% and energy rose 1.24%. Amazon fell nearly 5%, Alphabet slid 5% in its worst daily performance in over a year, and Meta Platforms dropped 2%. SpaceX posted its third straight negative session, falling 16%.
The selloff comes as investors rotate out of the "Magnificent Seven" names that powered much of this year's rally, with the tech-heavy Nasdaq now facing its steepest futures decline in months. The 10-year Treasury yield edged lower as oil prices retreated, with West Texas Intermediate crude slipping below $75 a barrel after the US Treasury authorized Iranian oil sales through August and mediating parties reported progress toward a final deal within 60 days.
Thursday's release of the May personal consumption expenditures price index — the Fed's preferred inflation gauge — will be the week's critical test. Core PCE is expected to show a modest acceleration from April, according to FactSet estimates, after the Federal Reserve's hawkish June meeting pulled forward expectations for an interest rate increase to as soon as October. Fundstrat Global Advisors' Tom Lee said conditions remain favorable for stocks, though he warned of an "abrupt change of market conditions" later this year.
This article is for informational purposes only and does not constitute investment advice.
