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Dow futures briefly fall 100 points as post-Brexit rally fades

Matt Clinch
Michael Nagle | Bloomberg | Getty Images. The major U.S. indexes are trading at all-time highs, but if you think the rally could stall, one trader says it’s not time to jump off the wagon yet.

U.S. stock index futures indicated a lower open Tuesday, after being closed Monday for the July 4 holiday, with "risk-on" sentiment pausing for breath after a strong rally last week.

Dow futures were briefly off about 100 points, while S&P 500 and Nasdaq futures were down 11 points and 25 points, respectively.

Equities around the world have broken their post-Brexit winning streak as uncertainty surrounding the U.K. vote still persists among investors. The ruling Conservative party will hold the first stage of its selection process for a new leader on Tuesday evening and potential candidates have been busy putting their ideas forward for the post-Brexit environment.

Sterling (Exchange:GBP=) has also fallen to a 2-1/2 year low against the euro and redemptions in one U.K. property fund have been halted after a string of outflows. The pound also fell to a fresh 31-year-low against the dollar early Tuesday.

European stocks extended losses in mid-morning trade on Tuesday with added volatility in the Italian banking sector.

"Markets are settling uncomfortably into a post-Brexit dystopia. Rumors abound of crashing business expectations and culls of bankers. But, unlike the continuing hurly-burly of the political world, here on the trading floor we've pretty much gone through all the 8 stages of Brexit: Shock, denial, anger, bargaining, depression, applying for an Irish passport, acceptance.. and finally hope that it might not matter anyway," Bill Blain, a senior fixed income broker at Mint Partners, said in a morning note.

In Asia, most markets stumbled on Tuesday, with shares in Australia falling amid an uncertain election outcome and an on-hold central bank. Mainland China shares rose as data showed services activity grew in June.

Back in the U.S., investors will be looking ahead to factory orders data due at 10 a.m. ET. At 2:30 p.m. ET New York Fed President William Dudley will also speak on the local economy at a roundtable discussion in Binghamton, NY.



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