Futures fall as recovery rally pauses ahead of Fed meeting

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(Reuters) – U.S. stock index futures dropped on Tuesday, giving back some gains after the Nasdaq notched a record closing high in the previous session, with focus now on the Federal Reserve’s two-day policy meeting.

Stocks in the travel industry including American Airlines (NASDAQ:AAL) Group Inc, United Airlines Holdings (NASDAQ:UAL) Inc, Alaska Air (NYSE:ALK) Group Inc and Marriott International (NASDAQ:MAR) Inc shed between 4.5% and 9.0% in premarket trading after surging on Monday.

While no major policy announcements are expected when the U.S. central bank wraps up its meeting on Wednesday, policymakers will issue economic projections for the first time since December, before a decade-long economic expansion was brought to a grinding halt due to coronavirus-induced lockdowns.

Last week’s strikingly strong employment data for May strengthened views that the worst of the economic fallout from the pandemic was over, and is also expected to be discussed at the meeting.

The Nasdaq’s record closing high on Monday confirmed a bull market began when markets hit a low on March 23, according to a widely used definition. The S&P 500, which is about 5% below its own all-time high, also erased its year-to-date losses.

At 6:19 a.m. ET, Dow e-minis were down 333 points, or 1.21%. S&P 500 e-minis were down 34 points, or 1.05% and Nasdaq 100 e-minis were down 63.75 points, or 0.64%.

Department store chain Macy’s Inc (NYSE:M) rose 5.8% after raising $4.5 billion in financing, as it tries to navigate through the fallout from the COVID-19 pandemic.

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