By Tanya Agrawal
REUTERS - U.S. stocks looked set to open little changed on Tuesday, a day after the S&P 500 and Dow Jones Industrial Average hit record highs, as oil prices fell to seven-month lows.
Oil prices dropped after news of increases in supply by several key producers, a trend which has undermined attempts by OPEC and other producers to support the market through reduced output.
Oil majors Chevron and Exxon were down about 1 percent in premarket trading.
The S&P 500 and the Dow Jones Industrial Average hit record highs on Monday with tech stocks finding favor as investors appeared to regain confidence in the economy after upbeat comments from Federal Reserve officials.
Chicago Fed President Charles Evans said it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise rates again.
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New York Fed head William Dudley said inflation was a bit low but should rise alongside wages as the labor market continues to improve.
On Tuesday, Boston Fed President Eric Rosengren said that the era of low interest rates in the United States and elsewhere poses financial stability risks and that central bankers must factor such concerns into their decision-making.
Dow e-minis were down 5 points, or 0.02 percent, with 21,218 contracts changing hands at 8:41 a.m. ET (1241 GMT).
S&P 500 e-minis were down 2.25 points, or 0.09 percent, with 119,331 contracts traded.
Nasdaq 100 e-minis were up 1.5 points, or 0.03 percent, on volume of 26,182 contracts.
The S&P technology sector is coming off two straight weeks of losses on worries about the sector's valuation and a move into more defensive sectors. Tech stocks have led the S&P 500's 9.6 percent rally this year.
"The sector which was held responsible for the pullback in equities in the last two weeks is driving indices to record highs," said Hussein Sayed, chief market strategist at FXTM said.
"Suddenly valuations are no longer a worrying factor, and Fed tightening is less of a concern. It seems like bargain hunters were waiting for the opportunity to dive in."
Among stocks, Lennar rose 2.9 percent to $54.30 after the No. 2 U.S. homebuilder reported a higher-than-expected quarterly profit.
Chipotle fell 4.1 percent to $441.90 after the burrito chain said its operating costs in the second quarter will be slightly higher than the first quarter.
Parexel International was up 3.9 percent to $87.19 after private equity firm Pamplona Capital is nearing a deal to acquire the pharmaceutical research services provider for more than $4.5 billion.
(Reporting by Tanya Agrawal)