U.S. stock futures were little changed on Tuesday after the S&P 500 and Dow Jones Industrial Average posted new record closes. Futures tied to the 30-stock Dow traded 56 points higher, or 0.1%. S&P 500 futures climbed 0.08%, and Nasdaq-100 futures advanced 0.1%. Wall Street is coming off a winning session, with the S&P 500 and Dow adding 0.3% and 0.2%, respectively. The Nasdaq gained 0.1%. The gains were modest but appeared to be a continuation of last week’s rally after the Federal Reserve cut interest rates by a half percentage point. The fed funds rate now sits at a range of 4.75% to 5%. Rate-sensitive sectors such as utilities and financials have moved higher in recent weeks in anticipation of the Fed’s cuts. There are now four sectors in the S&P 500 outperforming the market in 2024, compared to just two sectors back in July, according to Paul Hickey, co-founder of Bespoke Investment Group. “There’s been a lot moving underneath the surface. … You’ve seen the baton passed from these megacap stocks to the broader market,” Hickey said on CNBC’s “Closing Bell: Overtime” on Monday. While traders have cheered the outsized rate reduction, the market will likely experience heightened volatility over the coming weeks, according to Quincy Krosby, chief global strategist for LPL Financial. “Given how valuations have edged higher on the back of the market’s post Fed momentum, the market will be highly sensitive to any indication that the economy is softening at a faster pace,” she said. Traders will mull over fresh economic data on Tuesday, with the Conference Board’s consumer confidence reading for September due. The Richmond Fed manufacturing index for this month will also be out in the morning. Piper Sandler forecasts uptick in volatility for stocks as November election nears While stocks still remain at record-high levels, volatility hasn’t fully exited equity markets and could be a play a larger role as the election looms, according to Piper Sandler. “Equity markets remain constructive as the quarter-end nears. However, we anticipate some backing and filling in the weeks before the November elections,” analyst Craig Johnson wrote on Tuesday. — Brian Evans China stimulus not a ‘bazooka’, but it’s close, says Vital Knowledge Chinese stocks soared after the country’s central bank unveiled new stimulus to spur economic growth. Adam Crisafulli of Vital Knowledge called the easing measures the biggest news out of the overnight session. “The news is undoubtedly bullish for Chinese stocks (and cyclical/industrial sentiment broadly), although many are adopting a dismissive “here we go again” attitude toward the headlines, lamenting the scope and scale of the actions and anticipating a reversal of the present euphoria within a few days or weeks,” he wrote. “We’re not quite as cynical – the volume and coordinated nature of China’s stimulus steps overnight may not qualify as ‘bazooka’, but it’s close. — Fred Imbert Small caps to grow at a multiple of the ‘Magnificent Seven,’ says Richard Bernstein Small caps are poised to see massive gains over the next few months, according to Richard Bernstein of Richard Bernstein Advisors. “The reason, I think, that we’re such big bulls on mid-caps and small caps is that that’s where the earnings growth is forecasted to be,” the firm’s CEO and chief investment officer told CNBC’s “The Exchange” on Monday. “By the end of this year [or] early next year, we’re going to find that small caps … are going to grow at a multiple of what, say, the ‘Magnificent Seven’ are going to grow at.” He added that while this small-cap performance is not particularly unusual in a trough, it is unusual for it to be happening when the Federal Reserve is “actually easing into this accelerating profits environment” rather than tightening. “As profits rev up, we should see, normally, the economy just gets stronger, naturally,” he continued. “Now we’ve got the Fed easing on top of that. That’s like putting fuel on the fire.” When looking at deglobalization as a key investment theme, Bernstein anticipates that midcap industrial stocks that have a focus on the U.S. economy in particular will be the “big growth beneficiaries.” “As globalization contracts, we have to realize that it’s not just semiconductors that open up the United States to national security implications,” he said. “It’s the fact that we don’t produce anything here in the United States. That’s basically what our trade deficit shows. We think that presents a tremendous opportunity.” — Sean Conlon Stocks making the biggest moves after hours Check out the companies making headlines in extended trading: Snowflake — Shares of the data cloud company fell 3% after Snowflake announced a proposed private placement of $2 billion of convertible senior notes.AAR — The defense stock rose nearly 4%. In the first fiscal quarter, AAR reported adjusted earnings of 85 cents per share, up 9% from the year-ago period. Revenue came in at $661.7 million, up 20% from the prior year. The full list can be found here. — Hakyung Kim Stock futures open little changed U.S. stock futures were flat Monday night. Dow Jones Industrial Average futures slipped just 23 points, or 0.05%. Futures tied to the S&P 500 and Nasdaq 100 inched down 0.06% and 0.1%, respectively. — Hakyung Kim