Stock futures are flat after the Dow and S&P 500 close at records

Stock futures dipped in early morning trading Tuesday after the Dow Jones Industrial Average and the S&P 500 both closed at record highs, as strong economic data boosted hopes of a smooth recovery.

Futures on the Dow Jones Industrial Average shed just 18 points. S&P 500 futures and Nasdaq 100 futures also both traded in mildly negative territory.

Wall Street rallied to record levels on Monday after a blowout jobs report and a surge in the gauge of services industry activity showed the economic rebound gained momentum amid accelerated vaccine rollout.

“Vaccinations are rolling out at a record clip, and historic stimulus efforts from Congress have all paved the way for continued positive market momentum,” said Chris Larkin, managing director of trading and investing product at E-Trade Financial.

Bond yields had another quiet session with the 10-year Treasury yield held steady at 1.71%, easing fears of rising inflation.

Cleveland Federal Reserve President Loretta Mester told CNBC Monday that she is largely unconcerned by this year’s run-up in government bond yields.

“I think the higher bond yields are quite understandable in the context of the improvement in the economic outlook. The increase has been an orderly increase,” Mester said. “So I’m not concerned at this point with the rise in yields. I don’t think there’s anything for the Fed to react to.”

Investors continue to assess President Joe Biden’s $2 trillion infrastructure proposal and its chance to become reality. While politicians on both sides of the aisle support funding to rebuild American roads and bridges, disagreements over other priorities and the ultimate size of the bill remain. There’s also debate over Biden’s plan to raise the corporate tax to 28% in part to fund the plan.

Biden said Monday he is not worried that a corporate tax hike would hurt the economy. Conservative Democrat Sen. Joe Manchin of West Virginia reportedly said he opposes the proposed tax hike to 28%.