European stocks are set for a modestly softer open Tuesday, even as future prices point to another bullish session on Wall Street, as investors fade some of the recent market gains and eye developments in the tech sector that could suggest the current record run is losing some momentum.
Germany's DAX performance index, along with other benchmarks around the Continent, is expected to slip just a few points at the start of trading, according to opening calls from spread betting firm IG, as the euro holds onto overnight gains against the U.S. dollar.
Britain's FTSE 100 may also retreat from Monday's solid session, which saw the benchmark gain 0.55% to close at 7,340.91 points, with investors keeping close tabs on the progress of talks between London, Dublin and Brussels over the contentious Irish border issue in a post-Brexit Britain and the impact it will have on the U.K.'s negotiations to leave the European Union.
Early indications from U.S. equity futures suggest another solid session on Wall Street, with contracts tied to the Dow Jones Industrial average marked 57 points, or 0.23%, higher from last night's record close of 24,290.05 points. Futures linked to the broader S&P 500 are also edging higher and suggest a 4.25 point gain at the opening bell.
Monday's tech sector weakness, however, and the sector's notable underperformance in overnight Asia trading, does suggest investors may be questioning its ability to extend gains into the new year - although a good portion of the recent pullback is certainly linked to the U.S. Senate tax reform bill and the benefits it will provide to rival sectors that include bank and financial stocks.
Those twin dynamics kept tech shares under pressure in the Asia session and held down gains for the broadest regional benchmark, the MSCI Asia ex-Japan index, and pulled the Nikkei 225 into a 0.4% loss.
Part of the market's overall rotation, however, included a bump higher in oil prices, which gained on the back of new prices projections from Goldman Sachs and the anticipation of a drawdown in U.S. crude supplies taken from a Reuters poll of industry experts.
Brent crude futures contracts for February delivery were seen 0.22% lower at $63.32 each while WTI contracts for January were marked 0.14% lower at $57.39.