Nasdaq futures dip 0.4% Tuesday after a rally pushed the S&P 500 back above its 50-day moving average. With no fresh catalyst, traders question whether the move has follow-through ahead of Thursday's PCE print.
Alpha Score of 37 reflects weak overall profile with moderate momentum, poor value, moderate quality, poor sentiment.
Major U.S. index futures edged lower Tuesday morning, pausing after a broad rally on Monday that saw the S&P 500 gain 1.2% and the Nasdaq Composite add 1.4%. Volume on Monday was above the 20-day average, driven by a rotation into beaten-down technology shares that had lagged since early February.
The shift snaps a two-day selloff that had clipped roughly 3% from the Nasdaq, led by megacap names that had carried the index through January. Monday's move pushed the S&P 500 back above its 50-day moving average, a level traders said had acted as resistance for the prior week.
Tuesday's early action suggests the rotation may be losing steam. Nasdaq 100 futures were down about 0.4% by 7 a.m. ET. S&P 500 futures slipped 0.2%, while Dow futures were flat. The pullback came without a fresh catalyst – no major earnings, economic data, or Fed speakers on the calendar.
One trader at a New York-based hedge fund described the Monday rally as "a short squeeze dressed up as conviction," pointing to elevated short interest in several tech names that had been sold off for four straight sessions. The same trader said the follow-through Tuesday would determine whether the move had legs or would fade into a range.
Treasury yields were little changed, with the 10-year note at 4.25% after a 3-basis-point drop Monday. The dollar index nudged higher by 0.1%. Crude oil edged down, with West Texas Intermediate slipping 0.3% to $73.20 a barrel.
The week's main event remains the January personal consumption expenditures price index on Thursday. Core PCE is expected to show a 0.3% month-over-month increase, which traders noted could rekindle hawkish bets if it prints hot. A cooler number, several traders said, likely would not shift Fed expectations much, given that markets already discount a first cut by July.
The calendar stays light through Wednesday, with no Treasury auctions or data releases scheduled. The next scheduled Fed speaker is Governor Christopher Waller on Friday.
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