Stock futures traded slightly lower on Tuesday night after a technology-led selloff earlier within the day, with development shares giving again extra of their 2020 beneficial properties after a key policymaker recommended rates of interest may have to rise to forestall an financial overheating.  

Contracts on the Nasdaq dipped, after the index fell 1.9% in the course of the common session for its worst day since March. The S&P 500 additionally ended the session lower lower, whereas the Dow shook off earlier losses to commerce slightly greater. 

The sharp transfer lower in development shares got here after Treasury Secretary Janet Yellen recommended Tuesday that rates of interest may must be elevated to stave off an overheating within the financial system, with financial exercise selecting again up a lot sooner than anticipated as vaccinations happen and social distancing requirements get eased. Some firms have additionally mentioned that surging demand and provide chain shortages have pushed costs greater. Mentions of inflation on first-quarter earnings calls have surged by 800% year-over-year, according to Bank of America strategist Savita Subramanian.

“I think to some extent the market is now taking a bit of a pause thinking that some of the best news may be behind us at this point on stocks, including the growth stocks, especially as we look to more reopenings,” Rob Haworth, U.S. Bank Wealth Management senior funding strategist. “I think it’s two-fold: One, a great earnings season that people wonder if it will be repeated, and two, looking more to that reopening story.”

Plus, with shares having reached file highs final week, equities had been susceptible to a pull-back on the slightest set off, many strategists famous. And as first-quarter earnings season winds down, buyers might be left to ponder the long run coverage panorama, which can be considerably much less constructive for company income. 

“I do think there’s a potential for a short-term bounce in volatility due to those excessive valuations and all of the uncertainty that currently stands with respect to the infrastructure spending bill, ultimately how it’s going to be funded, and certain taxation policies,” Kevin Mahn, chief investment officer at Hennion and Walsh Investment Management, instructed Yahoo Finance. 

“But, beyond the short-term bouts of volatility, there is continued reason for optimism, whether it’s consumer confidence, whether it’s the strength in earnings, recognizing that thus far we have an 86% beat rate for the companies that have reported,” he added. “So there are reasons for optimism, but we would recommend that investors also consider adding diversification to their portfolios to help withstand those short-term bouts of volatility.”

6:13 p.m. ET: ET Tuesday: Stock futures edge lower 

Here’s where markets were trading as the overnight session kicked off: 

  • S&P 500 futures (ES=F): 4,157.25, down 1 level or 0.02%

  • Dow futures (YM=F): 34,018.00, down 2 factors or 0.01%

  • Nasdaq futures (NQ=F): 13,519.00, down 17 factors or 0.13%

NEW YORK, NEW YORK – MARCH 10: A man walks in front Nasdaq building at Times Square on March 10, 2021, in New York. The Nasdaq Composite continued falling more than half a percent during the day. Also, the move away from Apple Inc, Inc , Facebook Inc, Tesla Inc and Microsoft Corp, falling during the day, helped small-cap stocks rise more than double the gains of the S&P 500. (Photo by John Smith/VIEWpress)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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