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S&P 500 rally hits pause – Cramer and two others on what's next

Stocks fell sharply after market rally on optimism over Covid-19 re-opening plans

The S&P 500 fell on Tuesday following the market's recent rally.

Three experts weigh in on what could come next.

Jim Cramer, host of CNBC's "Mad Money," sees opportunity in Boeing but is cautious about the airlines. 

"I actually think that Boeing is OK because I think that we're on the verge of the Max being approved. I don't think it's going to be that much longer. And at that moment, if you want to sell, you can sell but I think that does matter. … We're hearing a lot about planes and how safe they are to fly in terms of the illness, if they're as safe as buildings, and what I would point out is the great thing about a building ... in a building you can stop people who are sick, and they're not going to sit next to you. But when you fly no one is going to stop that sick person from being next to you and that's what's the biggest fear that people have with flying, so I'm not a big fan. The airlines stocks have had a major move. I think it would be a good move to take something off the table in every one of those."

Raghuram Rajan, former Reserve Bank of India governor, says the Federal Reserve will likely keep looser monetary policies. 

"If you look at the Fed's balance sheet, it's gone up from $4 trillion to $7 trillion in the space of a few months. So it's expanded its balance sheet, it's lending to pretty much anything it can lend to, plus some more — it's lent to firms, it's lent to municipalities. The Fed has really pulled out all stops. Now in terms of what it can do more on the monetary policy side, there's little apart from saying, 'We will not raise interest rates until dozens such criteria are met, and we'll be a little more tolerant on inflation.' Perhaps something on that will come in future meetings, probably not this one."

David Kostin, chief U.S. equity strategist at Goldman Sachs, warns there could be downside ahead. 

"I think you've got three issues that are on the table with fund managers with whom I speak. The first issue is the momentum, which is that broadening of the rally that I talked about before. The second is valuation. And the third is taxes. And those three things to me suggest that the market is at the high end of the range at 3,200. And our target for the end of the year the S&P 500 is around 3,000, and there's more downside than upside as a result."