# European stocks and Dow futures step lower after rally

Dow futures
YM00,
-0.25%
dropped over 100 points, or 0.4%, while S&P 500
ES00,
-0.09%
and Nasdaq-100 futures
NQ00,
-0.04%
also pulled back.

“The equity market rally which is fueled by vaccine hope is taking a breather today, Basically, investors are trying to place their bets more carefully as the global equity markets recorded a record month,” said Naeem Aslam, chief market analyst at AvaTrade in a Wednesday research note.

“But traders do know that there is still a lot more upside left in equities as Pfizer and BioNTech have gained regulatory approval for their coronavirus vaccine in Europe,” said Aslam.

The U.K. government on Wednesday granted emergency approval for Pfizer
PFE,
+2.87%

0Q1N,
+2.17%
and BioNTech’s
BNTX,
-8.23%
COVID-19 vaccine, with limited distribution of a shot expected within days. Shares of AstraZeneca
AZN,
+0.07%

AZN,
+0.43%,
which is producing its own vaccine with Oxford University, rose 0.5%.

Investors were also keeping watch on stimulus talks in the U.S. The S&P
SPX,
+1.12%
and Nasdaq Composite
COMP,
+1.28%
logged record closes on Tuesday after a bipartisan group of lawmakers proposed a $900 billion coronavirus aid package.

Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell, testifying before a Senate panel, appeared to welcome the effort.

But expectations cooled after Senate Majority Leader Mitch McConnell, R-Ky., unveiled his own downsized proposal for a fiscal package, which included several provisions that were unlikely to receive Democratic support.

Read: Endgame afoot on Capitol Hill as lawmakers mull fiscal stimulus, funding, defense bills

On the geopolitical front, President-elect Joe Biden said in an interview with the New York Times that he wouldn’t immediately ease U.S. tariffs on China when he takes office in January. Auto stocks, sensitive to trade headlines, fell in Europe, with shares of BMW
BMW,
-1.47%
down nearly 2% and those of Volkswagen
VOW3,
-2.23%
dropped 1%.

Among other stocks on the move, shares of G4S
GFS,
+7.64%
jumped 7% after Canada’s Garda World Security lifted its offer for the London-listed security company by 24%, valuing it at 3.68 billion pounds ($4.94 billion).

The pound
GBPUSD,
-0.46%
fell 0.3% on signs the U.K. and Europe may be no closer to an agreement on their future trade relationship, once the U.K. leaves Europe’s single market on Dec. 31. The EU’s chief Brexit negotiator, Michel Barnier was expected to tell member states on Wednesday that key gaps between the two sides remain, according to media reports.