Stock futures mark below the testimony of Fresh Powell

Stock markets have faltered in recent days after a strong start to the year, with high-flying tech companies declining. Investors said an increase in government bond yields, driven by improved growth prospects and rising inflation expectations, has accelerated the rotation of technology stocks that led markets to rise during the pandemic and towards the best-placed actions to benefit from the end of the closures.

“This really is a function of the reopening of economies,” said Brian O’Reilly, head of market strategy at Mediolanum Investment Funds. “Bond yields are rising due to good vaccination rates in the U.S. and the UK and it’s causing a simple rotation, moving away from everything that worked well last year, home stays, to those who did not, the outside actions “.

“It’s a good story somehow, as the market is trying to set prices so that economies reopen,” he added.

The yield on the ten-year benchmark note, which moves inversely to its price, has risen to its highest level in a year this week. It rose to 1.411% on Wednesday, from 1.363% on Tuesday.

Powell on Tuesday reaffirmed its commitment to keeping easy monetary policies unchanged for the foreseeable future, which helped curb significant losses among technology companies. Investors expect a second day of filing Wednesday in the Senate Banking Committee. Mr. Powell will speak at 10 a.m. ET.

While the Fed has remained in the same message since the pandemic, the strength of the recovery could cause it to change course sooner than many investors expected, said Paul O’Connor, head of multi-asset management at Janus Henderson Investors.

“Markets expect it to be a 2022 story, but we are seeing significant improvements in US GDP. Somewhere in the middle of this year there will be a discussion about volume reduction,” he said.

The latest batch of earnings reports will be concentrated on Wednesday. Nvidia,

Booking Holdings and L Brands will publish their reports after the markets close.

PRA Health Sciences advanced more than 20% ahead of the opening bell after Dublin-based Icon said it would buy the company in a deal worth approximately $ 12 billion.

The square fell 2.9% in pre-market moves after the payments company reported a fourth-quarter profit on Tuesday.

Data on the sale of new homes will also be analyzed when published at 10.00 ET. The US housing market has performed well during the pandemic, due in part to strong demand and low mortgage rates.

Bitcoin rose 3.9% to $ 49,889.73 on Wednesday after falling 13% on Tuesday. They also won other cryptocurrencies that declined on Tuesday, such as ether.

In premarket trade, Tesla rose 4.5%. The company’s share price has fluctuated along with Bitcoin in recent days after the electric vehicle maker said it had bought $ 1.5 billion from the cryptocurrency.

Abroad, the Stoxx Europe 600 pan-continental index rose 0.5%.

Companies willing to benefit from the end of movement restrictions were some of the strongest performances. Travel agency TUI rose 8.5%, while UK-listed cruise operator Carnival added 7.4%. Dufry,

a tax-free store operator, gained 7.6% and airline operator IAG increased 4.4%.

Asia-Pacific indices fell. The biggest losses occurred in Hong Kong, where the city government moved to capitalize booming markets by raising the rate on stock trading. Hong Kong’s Hang Seng benchmark fell 3%, while Hong Kong stock exchanges and offsets fell 8.8%, even when the foreign exchange operator presented record annual net income and profits .

Mainland China’s CSI 300, which includes large companies listed in Shenzhen or Shanghai, fell more than 2.5%, with a Kweichow Moutai heavyweight index falling more than 5%. Now the index has fallen in four of the five sessions since the break of the Lunar New Year. The Japanese Nikkei 225 fell 1.6%.

Andy Maynard, head of equities at China Renaissance Securities, said investors were worried about costly valuations following rapid streamlining in mainland China and Hong Kong markets, especially in a context of rising bond yields. In a potential signal of growing caution, he noted, “You don’t see institutions buying downward.”

—Caitlin Ostroff contributed to this article.

Write to Will Horner to [email protected] and Xie Yu to [email protected]