The 6-day rally which pushed US indexes briefly to all time highs on Monday, fizzled as worries about the extent of the COVID-19 pandemic’s economic impact resurfaced coupled with second thoughts about just how effective the Pfizer vaccine truly is.
Meanwhile, investors dumped expensive growth and tech shares and snapped up small-caps and cyclicals that would benefit the most from an economic recovery from the pandemic. Futures on the Nasdaq 100 slumped 1.5%, at one point tumbling over 800 points from Monday highs, while contracts on the Russell 2000 rose almost 2%. Netflix, Facebook, Apple fell between 1.8% and 2.3% as investors rotated into sectors that are expected to benefit from a full reopening of the economy.
Amazon.com slipped in the pre-market after news it faces an antitrust complaint from European Union regulators. Beijing on Tuesday unveiled regulations to root out monopolistic practices in the internet industry, helping drive down shares of gaming-to-payment giant Tencent Holdings Ltd. and e-commerce titan Alibaba Group Holding Ltd.