Stock futures were slightly lower on Monday night after the major averages began June’s trading on a positive note.
S&P 500 futures slipped 0.2%, and Dow Jones Industrial Average futures lost 83 points, or 0.2%. Futures linked to the Nasdaq 100 ticked down nearly 0.2%.
In the regular session, the S&P 500 climbed 0.41%. The Nasdaq Composite advanced 0.67%, and the Dow added 35.41 points, or 0.08%.
Stocks ended the day higher despite rising tensions between China and the U.S., with Beijing countering President Donald Trump’s accusations that it had violated a temporary trade agreement. Investors had grown hopeful that the two countries could work out a trade deal, but this latest development points to negotiations taking a turn for the worse.
Meanwhile, the European Union criticized Trump’s intention to double steel tariffs to 50%, saying that such a move “undermines” its own negotiations with the U.S. An EU spokesperson said that the bloc was “prepared to impose countermeasures.”
But despite volatility continuing to persist at elevated levels, Jeff deGraaf, head of technical research at Renaissance Macro, is optimistic on the stock market’s short-term prospects.
“The next six weeks are some of the best six-week periods, historically, really rivaling only what we see in the fourth quarter,” he said on CNBC’s “Closing Bell.” “So this is not a time to lighten up on positions, just from the calendar’s perspective.”
Dollar General, Signet Jewelers and Nio are set to report earnings Tuesday before the bell. That morning, traders will also watch out for readings on April’s jobs openings, as well as durable goods and factory orders.
U.S. small cap stocks unlikely to outperform large caps, no matter what, Capital Economics says
Even if concerns that a U.S. economic slowdown will turn into a recession turn out to be unfounded, small cap stocks in the U.S. are unlikely to outperform larger companies, according to Capital Economics chief markets economist John Higgins.
Small cap stocks haven’t rebounded as much as large cap indexes since the market bottom in early April, as shown in equal-weighted indexes that give the same importance to each stock, regardless of their market value, Higgins said. What’s more, small cap underperformance has only been a U.S. phenomenon, not a global one.
Even fading worries about the U.S. economy are unlikely to drive small caps higher relative to large caps, Capital Economics says.
“We suspect the underperformance will continue as enthusiasm for AI grows again. That view is informed by the experience of the dotcom era: the underperformance of [small cap] equities then only ended in mid-1999, the year before the bubble burst,” the researcher wrote.
— Scott Schnipper
Big cybersecurity ETFs close at records
A pair of cybersecurity exchange traded funds ended the first trading day of June with record closes.
The Amplify Cybersecurity ETF (HACK) popped 1.6%, closing at a high dating back to its inception in 2014. The First Trust NASDAQ Cybersecurity ETF (CIBR) jumped 1%, closing at a record that goes back to 2015.
Both ETFs also touched fresh 52-week highs on Monday.
Names lifting the ETFs included CrowdStrike, up about 1.7%; Rubrik, up 4.6%; and Zscaler, up 6.3%.
–Darla Mercado, Gina Francolla
Stocks making the biggest moves after the bell: EchoStar, Credo Technology and more
These are the stocks moving the most in extended-hours trading:
EchoStar — The telecommunications stock popped 5% after EchoStar disclosed that it would not make around $183 million in cash interest payments on a series of Dish’s notes. EchoStar said that this non-payment was made in light of recent uncertainty raised by the Federal Communications Commission.
Pegasystems — Shares added 2% after the software firm raised its full-year earnings guidance to $3.94 per share, ex-items, versus its prior guidance of $3.10 and FactSet’s estimate of $3.40. Pegasystems also updated its full-year revenue guidance to $1.7 billion, up from its previous forecast of $1.6 billion and FactSet’s $1.62 billion estimate.
Credo Technology — The data infrastructure stock soared 13% after reporting fiscal fourth-quarter non-GAAP earnings of 35 cents per share, exceeding the 27 cents per share analysts polled by FactSet had expected. Credo’s $170 million revenue also beat the estimated $159.6 million.
— Lisa Kailai Han
Stock futures are little changed
Stock futures traded near flat Monday night.
Dow futures were unchanged shortly after 6 p.m. ET, while S&P 500 futures were marginally below flat. Nasdaq 100 futures added less than 0.1%.
— Lisa Kailai Han