US pre-open: Stocks called to open lower amid fears of second wave
Wall Street futures were pointing to losses ahead of the bell on Tuesday as the Dow Jones looked set to pump the breaks on its comeback rally.
As of 1225 BST, Dow futures were down 0.99%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.87% and 0.46% points lower, respectively.
The Dow closed 461.46 points higher on Monday as stocks continued to build upon last week's sharp gains, while the S&P 500 returned to positive territory for the year and the Nasdaq Composite registered its first record close since 19 February.
Fears surrounding a second spike in Covid-19 cases as a result of the US economy's reopening weighed on sentiment a little ahead of the bell, with stocks that have benefited from increased optimism, such as United Airlines, Delta Air Lines, Carnival and Royal Caribbean, all dropping more than 5% before the open.
With Monday's rally coming in the face of the National Bureau of Economic Research's declaration that the US had officially entered into a recession back in February, scuttling a 128-month expansion, AvaTrade's Naeem Aslam said the Dow was now set up for a correction.
"This indicates that the stock rally has gone a little too far," he said. "However, the upward momentum is still strong because the price is still above all the major, 50, 100, and 200-day smooth moving averages."
Texas, one of the first US states to relax its stay-at-home orders, reported a record number of coronavirus hospitalisations on Monday, with 1,935 patients across the state, according to the Texas Department of State Health Services.
Covid-19 cases have also been slowly ticking up across the US since the Memorial Day holiday on 25 May, according to Johns Hopkins University School of Medicine.
On the data front, small-business owners became more optimistic about an economic rebound throughout May and began to believe that a coronavirus-induced recession would be "short-lived", according to the National Federation of Independent Business.
The NFIB's small-business survey, which posted its sharpest decline in history in March, rose 4.5 points in May to 94.4 - double the increase expected on the Street.
Still to come, rebook data will be published at 1355 BST, while wholesale inventory figures will be posted at 1500 BST, as will JOLTs Job Openings data.
In the corporate space, Hertz shares doubled overnight, erasing all of its post-bankruptcy losses, while Signet Jewelers posted a softer-than-expected loss and Macys shares surged after raising $4.5bn of new financing.
GameStop and Tiffany will both report quarterly earnings.