Stock futures declined early Tuesday morning after a sleepy day of trading as investors await key inflation data due out later in the week.
Futures tied to the Dow Jones Industrial Average edged lower by 123 points, or 0.37%. S&P 500 futures and Nasdaq 100 futures also fell 0.38% and 0.51%, respectively.
In regular trading on Monday, all three of the major averages finished slightly higher. The Dow finished the day up about 16 points, or less than 0.1%, after jumping more than 300 points earlier in the day. The S&P 500 added 0.3%, and the tech-heavy Nasdaq Composite advanced 0.4%.
The indexes on Monday gave back most of their gains from earlier in the day as the 10-year Treasury yield spiked up to 3% and hit its highest level in nearly a month.
Sentiment was largely muted Monday, with no U.S. economic data releases and a quiet Federal Reserve in its blackout period. There were also no earnings reports for major companies.
Investors are still assessing whether the recent bounce in stocks is a bear market rally or has the market reached a bottom from this year’s sell-off.
“Since the beginning of the year we’re seeing an altitude sickness when you look at the valuation multiple,” said Ed Yardeni, president at Yardeni Research. He spoke on CNBC’s “Closing Bell: Overtime.”
“To a large extent, clearly, with the benefit of hindsight, the market was overvalued,” he said. “A lot of that was in the negative cap seat, big cap names, related companies. I think we’ve seen a tremendous correction in that area. And now the question is whether the market can accept the kind of earnings expectations that analysts are delivering and whether those expectations will be correct.”
Investors are still following what is a lighter week in company earnings. J.M. Smucker, United Natural Foods and Cracker Barrel are all slated to report before the bell on Tuesday.
In economic data, May’s consumer price index reading is the big one investors are focused on, which is due out Friday. If the reading is cooler than April’s numbers, as expected, some could interpret it as a sign that inflation has peaked.