S&P 500 futures dip amid concern of rally exhaustion and China worries for Apple

What’s driving markets

A cautious mood has enveloped risk assets early Tuesday, with investors of a more technical bent wary of the previous session’s action, when the S&P 500 rose to a fresh high but then finished in the red at the close.

“After posting 16 weekly gains out of 18 for the first time since 1971, yesterday saw the S&P 500 get the week off to a subdued start as we await several key events later this week, including appearances from Chair Powell [at Congress on Wednesday and Thursday], the U.S. jobs report [Friday], and the ECB decision [Thursday],” said Jim Reid, strategist at Deutsche Bank

Index futures are also being pressured by indications Apple’s shares
AAPL,
-2.54%
will fall 1.5% to a fresh four-month low after news that iPhone sales in China fell 24% during the first six weeks of the year.

A tentative tone also has been inherited from Asia as the overnight pullback in some U.S. tech stocks and frustration over the lack of a big economic stimulus emerging from China’s National People’s Congress pushed Hong Kong’s Hang Seng
HK:HSI
down 2.6%.

“China’s highly anticipated NPC fell short of altering economic or policy trajectories, leaving some disappointed, particularly those hoping for a larger fiscal deficit-to-GDP target. The unchanged target of 3% fell below expectations and signaled a cautious approach to fiscal policy,” said Stephen Innes, managing partner at SPI Asset Management.

Companies reporting earnings Tuesday include Target
TGT,
-3.09%,
Ferguson
FERG,
+0.52%,
and NIO
NIO,
-7.79%
before the opening bell rings on Wall Street, followed by CrowdStrike
CRWD,
-0.25%,
Nordstrom
JWN,
-0.68%
and Box
BOX,
+5.05%
after the close.

U.S. economic updates set for release on Tuesday include January factory orders and February ISM services, both at 10 a.m. Eastern.

Central bank officials making comments include Fed Vice Chair for Supervision Michael Barr talking at noon and again at 2:15 p.m.