Stock futures fall slightly to begin June trading following back-to-back monthly advances

Dow Jones Industrial Average futures implied an opening loss of about 24 points. Dow futures fell 49 points or 0.2%. S&P 500 lost 0.2%. Nasdaq 100 futures lost 0.5%.

The S&P 500 and Dow each gained at least 3% last week while the Nasdaq Composite advanced 1.8% to close out May. Those gains were propelled by increasing bets by traders that the global economy will successfully reopen after the coronavirus forces a shutdown of most economic activity.

Last week’s gains led the major averages to their first back-to-back monthly advances since late 2019. The Dow and S&P 500 gained 4.3% and 4.5%, respectively, for May while the Nasdaq Composite advanced 6.8%.

Here’s what traders were monitoring heading into the new month:

  • States continue to reopen their economies after the coronavirus pandemic forced the country to shutter nonessential businesses. The reopening is now taking place amid widespread protests across the U.S. over police brutality.
  • Traders are also grappling with rising tensions between China and the U.S. President Donald Trump said Friday the U.S. would end its special treatment towards Hong Kong.
  • The announcement came after China had approved a national security bill that would increase the mainland’s power over the city. However, Wall Street breathed a sigh of relief as Trump did not say he would pull the U.S. out of the phase one trade deal reached earlier this year.
  • Data showed China’s manufacturing activity in expanding in May. Investors have been monitoring China’s economic data for signs of recovery in the country, where the coronavirus was first reported.
  • Disappointing trial results from Pfizer for a breast cancer drug dampened market sentiment. The company made the announcement Friday evening. Its shares were down 6% in Monday premarket trading.

“Nothing that has happened since the market closed on Friday has been market positive,” said Art Hogan, chief market strategist at National Securities. “When you think about clearly we’re beginning to take U.S.-China tensions seriously and you add on to that the massive amount of disruption going on in almost every major city in the country right now, none of that could be seen as market positive.”

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