US stock futures fall after major averages fall off records

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US stock index futures fell slightly in early morning trading on Wednesday, after the major averages ended their regular trading on Tuesday in the red, weighed by inflation concerns.

Futures linked to the Dow Jones Industrial Average were down 89 points. S&P 500 and Nasdaq 100 futures also declined moderately.

The Dow closed the regular trading session down 107 points, or 0.3%. The decline came a day after the Dow closed at a record high. The S&P and Nasdaq Composite indices reached all-time highs on Tuesday before giving up those gains and eventually closing lower. The S&P 500 is down 0.35%, while the Nasdaq Composite is down 0.38%, each posting their first negative session in three.

The decline came after the Labor Department said inflation last month rose at its fastest pace in nearly 13 years. The consumer price index jumped 5.4 percent from a year earlier, which was above expectations for a 5 percent increase, according to economists polled by Dow Jones. However, since much of the overall increase came from a jump in used car prices, some were quick to argue that the inflation would likely be temporary.

Amid a bearish day on Wall Street, the S&P 500 tech sector bucked the downside and closed at an all-time high. Standard & Poor’s 10 other sectors fell, and real estate led the losses.

Major averages are still hovering around all-time highs, and Wall Street strategists are optimistic about what the second half of 2021 holds as the economy continues to recover from Covid-19.

“After 2020, we will never forget, we look forward to the second half of 2021, and even into 2022, with optimism about the future,” said Bert White, managing director and chief investment officer of LPL. “We believe we are at the beginning of the economic cycle and the next recession may be years away.”

UBS raised its target for the Standard & Poor’s 500 Index for December 2021 to 4,500 on Tuesday, compared to a previous forecast of 4,400. The call hinges on strong numbers from second-quarter earnings.

“We believe the bull market remains on solid foundations driven by massive consumer cash balances, increased business investment, and a still-accommodative Federal Reserve,” the company said in a note to clients.

JPMorgan and Goldman Sachs kicked off earnings season on Tuesday, with both banks beating top estimates and earnings. Bank of America, Citigroup and Wells Fargo are due to report earnings before the market opens on Wednesday, as are BlackRock, BNC Financial and Delta.

In total, 23 companies on the S&P 500 will report quarterly results this week.

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