Futures U.S. stock markets fell on Monday and signaled losses on major indices as rising bond yields raised concerns that technology stocks would be too costly.
Futures tied to the S&P 500 fell 0.7%, indicating that the breadth of the market will continue to fall after the New York opening bell. The benchmark fell 0.7% last week. Contracts related to the high-tech Nasdaq-100 fell 1.3% and Dow Jones Industrial Average futures fell 0.6%.
Investors are betting that the deployment of vaccines and the $ 1.9 trillion stimulus package proposed by President Biden will accelerate the economic recovery later this year.
These expectations, combined with concerns about rising inflation and the possibility of interest rates rising earlier than expected, have contributed to the liquidation of US government bonds in recent weeks. Falling bond prices have resulted in higher returns, which has raised concerns that stocks that want highs are starting to look less attractive than assets considered risk-free.
“As performance increases, there is more demand [government bonds] in relation to other assets, “said Hani Redha, portfolio manager at PineBridge Investments.” How much are you willing to pay for the shares? If you only get a very low return on the bonds, you should be willing to pay a higher amount. “But that starts to change when bond yields increase.”