Stock futures saw a decline on Tuesday morning following drops in the S&P 500 and the Dow Jones Industrial Average as the second quarter commenced.
S&P 500 futures edged down by 0.2%, while Nasdaq 100 futures experienced a slight dip of 0.16%. Futures linked to the 30-stock Dow witnessed a fall of 240 points, equivalent to 0.60%, influenced notably by UnitedHealth shares’ decline.
During after-hours trading, health insurers faced a downturn subsequent to the Centers for Medicare & Medicaid Services finalizing the 2025 rate announcement for Medicare Advantage and prescription drug coverage. Projections indicate a 3.7% year-over-year increase in government payments towards these plans for 2025, consistent with earlier proposed rates. This development resulted in Humana registering a loss of 9%, UnitedHealth dropping by 4%, and CVS Health tumbling nearly 6%.
Monday’s session concluded with the Dow shedding nearly 241 points, or 0.6%, and the S&P 500 sliding by 0.2%. However, the Nasdaq Composite, primarily composed of technology stocks, defied the trend by closing 0.1% higher.
These market movements were influenced by data from the manufacturing sector surpassing economists’ expectations, which raised doubts about the necessity of a Federal Reserve rate cut. Current Fed funds futures data suggests a 58% probability of a rate cut at the central bank’s June meeting, according to the CME FedWatch Tool.
David Miller, co-founder and chief investment officer of Catalyst Capital Advisors, expressed confidence in the market’s current position, noting a sense of relative comfort. He anticipates equities to trade within a relatively stable range in the immediate future.
Miller commented on valuations, deeming them reasonably fair at present. He emphasized the need for unforeseen developments, particularly from upcoming employment reports or the next Consumer Price Index (CPI) figure, to deviate from the current market status quo.
On the economic horizon, traders await the February Job Openings and Labor Turnover Survey, scheduled for release at 10 a.m. ET on Tuesday. Additionally, durable orders for February are slated for Tuesday morning. However, the focal point of the week remains the eagerly anticipated March payrolls report, expected to be published on Friday.
