By Caitlin Ostroff

U.S. stock futures edged lower Friday as some investors grew concerned that President-elect Joe Biden's $1.9 trillion Covid-19 relief plan could lead to higher taxes.

Futures tied to the S&P 500 fell 0.3%, indicating the benchmark index may decline for a second day. Contracts tied to the Nasdaq-100 edged less than 0.1% lower and those linked to the Dow Jones Industrial Average slipped 0.3%.

The S&P 500 is on track to end the week lower, erasing some of the gains made in early January when the gauge rallied to a record high. Markets have for weeks cheered Democrats' plans to expand government spending and bolster the economic rebound. But the size of Mr. Biden's plans, laid out late Thursday, served to check some of that optimism.

"The magnitude obviously was surprising on the upside," said Wei Li, head of investment strategy for BlackRock's exchange-traded fund and index investments for Europe, Middle East and Africa. "With the Senate majority, [taxes] could be coming in the medium term and that is something the market has to assess as well."

Investors are hoping that additional spending will help steer the U.S. economy through a winter that has seen high Covid-19 infection rates and worsening economic data. Figures released Thursday showed that the number of workers filing for jobless benefits posted its biggest weekly gain since the pandemic hit last March.

"When you see data this bad, you have to question if the prevailing expectation -- for cyclical recovery to come through -- if that would be shaken," Ms. Li said.

Data on U.S. retail sales in December, due at 8:30 a.m. ET, will offer more insight into the strength of consumer spending and the severity of the broader economic slowdown at the end of the year.

Investors will also get an indication of how confident American households are when the University of Michigan releases preliminary January figures for its consumer sentiment index at 10 a.m. ET. Consumer spending accounts for more than two-thirds of U.S. economic activity.

In bond markets, the yield on the 10-year Treasury note ticked lower to 1.109%, from 1.128% Thursday. Yields fall when bond prices rise.

Despite days that see a pullback in markets, investors still expect that the additional fiscal stimulus will support a rally in stocks this year.

"Ultimately, you can't expect equities to go up every day in a straight line," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "The numbers are really quite incredible and I think it is going to all add up to a boom in growth once the vaccines are rolled out."

Ahead of the opening bell, major U.S. banks including JPMorgan Chase, Citigroup and Wells Fargo are scheduled to report quarterly earnings starting at about 6:45 a.m. ET. Much of the focus is likely to be on the banks' forecasts for 2021.

Overseas, the pan-continental Stoxx Europe 600 fell 0.3%.

Trading in Asia ended on a mixed note. China's Shanghai Composite was largely flat, while Hong Kong's Hang Seng gained 0.3% and South Korea's Kospi slid 2%.

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Write to Caitlin Ostroff at caitlin.ostroff@wsj.com

(END) Dow Jones Newswires

01-15-21 0505ET