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U.S. stock futures pointed to slight losses early on Tuesday after eking out gains the previous day. The market looks to have largely shrugged off the latest downgrade of the U.S.’s credit rating and is looking for a new catalyst.
Dow Jones Industrial Average futures were down 71 points, or 0.2%. S&P 500 futures were falling 0.4% and Nasdaq 100 futures were dropping 0.5%.
Stocks rebounded Monday after initial sharp declines in the wake of Moody’s stripping the U.S. of its last triple-A credit rating, citing large fiscal deficits and rising interest costs. The yield on the benchmark 10-year Treasury note stood at 4.438% early on Monday, ticking down from the previous day.
“Stocks sold off slightly following the downgrade but more likely a result of profit taking in the equity market following the steep rally off early April lows,” wrote Dave Sekera, chief U.S. market strategist at Morningstar. “The yield on the 10-year U.S. Treasury rose slightly, but only to the same yield it traded mid-last week. These movements appear to be more indicative of market movement looking for a headline than a headline moving the market.”
Attention is now likely to turn to trade developments, with dozens of countries negotiating with the Trump administration ahead of a deadline of July 8 for the imposition of sweeping tariffs. JPMorgan CEO Jamie Dimon warned Monday that the full impact of tariffs hadn’t passed through to the broader economy.
Further insight into the effect of tariff talk on the consumer could be provided when home-improvement retailer Home Depot reports Tuesday morning.
