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European stocks and Dow futures pull back before earnings and next wave of data

People wearing protective masks ride the “Transports publics lausannois” metro underground during the COVID-19 outbreak, in Lausanne, Switzerland, on July 6, 2020.

Associated Press

Stocks in Europe pulled back on Tuesday, as traders wait for the next wave of information on the economy, the spread of coronavirus and corporate earnings.

After a 1.6% surge on Monday on hopes for Chinese stimulus, the Stoxx Europe 600 SXXP, +0.91% lost 1.1%.

The index has climbed 33% from its March low. The U.S. S&P 500 SPX, +1.34% has climbed 42% from the depths of March.

The major regional indexes also dropped, with the German DAX DAX, -0.80%, French CAC 40 PX1, +0.77% and U.K. FTSE 100 UKX, +0.73% retreating.

Gains might be tougher before the start of second-quarter earnings season.

“While the stock market has decoupled from the economy in recent months, there is the potential that earnings season could reunite them, albeit temporarily, and make stocks more sensitive to rising infection rates as well as a possible lack of fiscal stimulus,” said Kristina Hooper, chief global market strategist at Invesco. U.S. lawmakers have yet to agree to a new round of unemployment benefits.

German industrial production rebounded a slower-than-forecast 7.5% in May, according to data released Tuesday. The European Commission lowered its eurozone economic forecast by a percentage point, now seeing a contraction of 8.7% this year.

Job-openings data highlight a quiet U.S. economics calendar.

Futures on the Dow industrials YM00, +0.92% declined 293 points.