Dow, S&P 500 futures hit pause on record-setting rally

The roaring rally in US stocks lost steam on Tuesday, with futures hitting pause as investors assessed whether buying has been overdone and what Donald Trump’s cabinet picks mean for policy.

Dow Jones Industrial Average futures (YM=F) nudged 0.1% lower, while S&P 500 futures (ES=F) shed roughly 0.2% after both gauges closed above key milestones. Contracts on the tech-heavy Nasdaq 100 (NQ=F) edged down 0.1%.

Wall Street analysts are signaling that the post-election surge in stocks could soon sputter after lifting the major gauges to record highs. Investors have lifted their exposure to US stocks to an 11-year high, Bank of America found, and those bullish bets lay the ground for profit taking, Citi strategists said.

At the same time, the market is pondering the policy impact of Trump’s likely cabinet picks. Florida Sen. Marco Rubio has been tapped for secretary of state, joining other high-profile China hawks on the team. The prospect of tougher tariffs dragged on Chinese stocks and gave weight to worries that the next president’s economic plans could spur inflation.

Bitcoin’s record-breaking rally put the cryptocurrency within reach of touching $90,000 at one point early Tuesday before its pace slackened. The token was last trading near $87,240, up about 6%.

Other “Trump trades” also lost some fizz. Tesla’s (TSLA) stock slipped into the red in premarket after soaring thanks to CEO Elon Musk’s alliance with the incoming president. Crypto-linked stocks Coinbase (COIN) and Robinhood (HOOD) struggled for gains.

Focus is starting to turn to Wednesday’s report on the consumer price index for October, watched for signs that inflation is cooling as the Federal Reserve desires. Retail sales data on Thursday is another key input for the Fed’s policy decision at its December meeting — its last before the Trump administration takes office.

Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards