Stock futures flat after S&P 500 snaps seven-day winning streak

U.S. stock futures moved higher in overnight trading and pointed to gains at the open on Wednesday after the S&P 500 closed lower for the first time in eight days.

Dow futures rose 70 points. The S&P 500 and Nasdaq-100 futures gained 0.27% and 0.5%, respectively.

After the bell on Tuesday, President Donald Trump said the U.S. government will purchase 100 million doses of Moderna’s experimental coronavirus vaccine, which is currently in late-stage human trials. 

Earlier, former Vice President and presidential candidate Joe Biden announced Sen. Kamala Harris of California will join him on the Democratic ticket. 

A return of risk appetite following encouraging economic numbers and hopes of new coronavirus relief package and even a vaccine boosted the 500-stock index for much of the trading day on Tuesday.  However, the S&P 500 ended the day down 0.8% — snapping a seven-day winning streak — as technology stocks dropped. 

The S&P 500 has rallied more than 52% since its March low and is 1.8% from its record high. 

The Dow Jones Industrial Average dipped more than 100 points but at one point traded above 28,000 for the first time since February. Stocks that benefit from the reopening of the economy and a Covid-19 vaccine capped the average’s losses. 

The Nasdaq Composite was the underperformer, losing 1.7% as investors rotated out of technology stocks. Netflix, Microsoft, Amazon, Facebook, Alphabet and Apple all closed lower. 

Sentiment was boosted earlier in the day after local news agencies reported Russian President Vladimir Putin claimed the country had given regulatory approval for the world’s first Covid-19 vaccine.

“A combination of the S&P 500 Index making its first real attempt at an all-time record high after seven straight days of advances, its old leadership — technology and FANNGs — continuing a recent trend of struggling and another day without an agreement nor even renewed talks in DC regarding a new stimulus package finally caught up with the stock market,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “The first signs of trouble today brought a lot of selling by investors anxious to lock-in recent gains.” 

Investors are also juggling uncertainty over a second coronavirus stimulus bill. Over the weekend, Trump signed four executive orders to extend some coronavirus aid. Treasury Secretary Steven Mnuchin said Monday the White House is open to resuming coronavirus aid talks with Democrats and putting more relief money on the table to reach a compromise. 

The Labor Department is set to release key inflation data on Wednesday at 8:30 a.m. ET. Economists polled by Dow Jones are expecting the consumer price index increased 0.3% in July, after jumping 0.6% in June. Core CPI is expected to rise by  0.2%, or 1.2%  on an annualized basis, according to Dow Jones.

Earnings seasons continues on Wednesday with Cisco Systems, Lyft and SmileDirectClub all reporting after the closing bell. 

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