US Stocks Eye Cautious Open After S&P 500, Nasdaq Close At Record High — But Strategist Says FOMO Will Keep Rally Alive

U.S. stock futures showed signs of investor nervousness early Tuesday, following the broader market's close at a fresh record in the previous session. 

Earnings optimism and lingering hopes that the tariff crisis will be resolved have driven the recent upside. More earnings will be released on Tuesday, providing further direction to traders.

As of 12:34 a.m. ET on Tuesday, the S&P 500, Nasdaq 100, and Russell 2000 futures all traded slightly lower, while the Dow futures edged up.

On Monday, stocks launched into a strong rally in early trading and then moved roughly sideways before giving back some of the gains. Verizon stock (VZ) rallied over 4% on earnings.

The Magnificent Seven group witnessed substantial gains, with Alphabet (GOOG) (GOOGL) climbing 2.72% ahead of its earnings due Wednesday.

While the S&P 500 notched up a fresh record close and the Nasdaq Composite extended its record streak to six straight sessions, the Dow Jones ended marginally lower.

Treasuries rallied on Monday after the U.S. leading economic index fell more than expected, with the yield slipping below the 4.4% level.

The Invesco QQQ Trust (QQQ), an exchange-traded fund (ETF) that tracks the Nasdaq 100 Index, ended up 0.52%, and the SPDR S&P 500 ETF (SPY) added 0.19%.

The SPDR Dow Jones Industrial Average ETF Trust (DIA) edged up 0.04%, while the iShares Russell 2000 ETF (IWM) ended 0.40% lower.

Fed Vice Chair for Supervision Michelle Bowman will feature in a TV interview to be aired at 7:30 a.m. ET.

Fed Chair Jerome Powell will give opening remarks at the Integrated Review of the Capital Framework for Large Banks Conference, Washington, D.C., at 8:30 a.m. ET. Bowman will moderate a panel discussion at the conference at 1 p.m. ET.

The Richmond Fed will release the results of its July survey of manufacturing activity at 10 a.m. ET.

Key earnings reports for the day include those from Coca-Cola (KO), homebuilders D.R. Horton (DHI) and PulteGroup (PHM), General Motors (GM), Halliburton (HAL), Capital One Financial (COF) and Texas Instruments (TXN).

Commenting on the market’s record run, fund manager Louis Navellier said, “With earnings strong and new highs being hit almost daily, not only is short covering in motion, but the huge amount of cash still on the sidelines has growing FOMO.”

The strategist noted that the CBOE Volatility Index (VIX) has fallen materially last month, suggesting that some capitulation by the bears has occurred.

Crude oil futures fell by over 1% in overnight trading amid concerns about demand, stirred by ongoing uncertainties, and gold futures edged down after rising past 3,400 an ounce on Monday.

The 10-year Treasury yield flatlined, and the U.S. dollar was slightly higher against most major currencies.

Most major Asian markets rose, tracking the buoyancy on Wall Street overnight while the Japanese market, which reopened after Monday’s public holiday, fell moderately as traders took stock of the evolving political scenario in the wake of the ruling Liberal Democratic Party led by Prime Minister Shigeru Ishiba losing majority in the upper house in election held over the weekend.

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