Market Snapshot: U.S. stock futures point to renewed pressure on tech as bond yields jump


Stock-index futures were mixed Thursday, with the Nasdaq-100 contract under pressure as a jump in Treasury yields following the previous day’s Federal Reserve policy meeting seen fueling another round of rotation into more cyclically sensitive sectors.

What are major indexes doing?
  • Futures on the Dow Jones Industrial Average

    were up 18 points, or less than 0.1%, at 32,922.
  • S&P 500 futures

    fell 18.85 points, or 0.5%, to 3,944.75.
  • Nasdaq-100 futures

    dropped 165.75 points, or 1.3%, to 13,023.25.

Stocks rallied Wednesday after the Federal Reserve vowed it would maintain easy monetary conditions. The Dow

closed above the 33,000 milestone for the first time, while the S&P 500

also closed at a record and the Nasdaq Composite

reversed a decline to end solidly higher.

What’s driving the market?

The Federal Reserve on Wednesday boosted its outlook for robust economic growth, while Chairman Jerome Powell reiterated that policy makers want to see inflation push above its 2% target, accompanied by significant improvement in the labor market, before it will begin raising interest rates or pulling back on its program of asset purchases.

Read: What we learned — and what we didn’t — from Jerome Powell’s press conference

“You have a rapid economic recovery coming out from an induced coma, a Federal Reserve unwilling to pull back from emergency measures and a large amounts of U.S. fiscal stimulus finding their way into equities by retail investors,” said Hussein Sayed, chief market strategist at FXTM, in a note. “However, this isn’t a ‘buy everything’ situation.”

Powell didn’t push back against a rise in long-term debt yields, which has seen the yield on the 10-year Treasury note

rise significantly over the past six weeks on expectations an economic recovery boosted by trillions of dollars in fiscal spending by the U.S. government will fuel inflation. The 10-year yield jumped nearly 9 pasis points Thursday morning to trade above 1.72%.

“The higher bond yields move from here, the more challenging it becomes for growth stocks to resume their upward trajectory,” Sayed said. “Highly priced tech stocks trading at elevated multiples compared to historic averages will likely remain under pressure in the short to medium term, so it makes sense to reduce their weight in portfolios.”

Weekly data on applications for unemployment benefits will be released at 8:30 a.m. Eastern. Economists expect first-time claims to fall to 700,000 in the week ended March 13 from 712,000 the previous week. At the same time, the Philadelphia Fed’s March manufacturing survey is expected to come in at 22.0, down from a 23.1 reading in February.

The February Index of Leading Economic Indicators is due at 10 a.m.

Which companies are in focus?
  • Shares of Dollar General Corp.

    fell more than 5% in premarket trade after reporting earnings that fell short of expectations.
  • Accenture PLC

    shares rose 1.8% after the company topped earnings and revenue forecasts and raised its outlook, while also increasing what it will return to shareholders and announcing a bonus for employees.

The New York Post: Climate czar John Kerry caught going maskless on flight

Previous article

Futures Movers: Oil futures head for a more than 2-week low on U.S., Russia tensions

Next article

You may also like


Leave a reply

Your email address will not be published. Required fields are marked *

More in News