A trader on the floor of the New York Stock Exchange.
Source: New York Stock Exchange
Stock futures remained stable in trading overnight Sunday after the S&P 500 posted its first losing week in three.
The futures of the Dow Jones Industrial Average were flat. The future S&P 500 and Nasdaq 100 also varied little.
The move in futures came after the S&P 500 and Nasdaq Composite achieved a two-week winning streak with a loss of 0.7% and 1.6%, respectively, last week. The Dow blueback gained 0.1% in the same period, with support from Caterpillar and JPMorgan.
Some equity investors were concerned about the rapid rise in bond yields in recent weeks, as they could hurt especially high-growth companies that relied on easy lending while diminishing the relative attractiveness of actions.
The ten-year Treasury yield jumped 14 basis points last week to 1.34%, almost the highest level since February 2020. So far this month, the benchmark rate has risen 25 points basic.
“This yield move should be something investors need to keep a close eye on,” Matt Maley, market strategist at Miller Tabak, said in a note. “Just because long-term rates are extremely low on a historical basis, we don’t think they should increase as much as most experts believe … before they affect the stock market.”
Meanwhile, many on Wall Street believe the jump in bond yields reflects a sign of growing confidence in the economic recovery and that stocks should be able to absorb higher rates amid strong gains.
“We don’t see the recent rise in yields as a threat to the bullish market,” Keist Lerner, Truist’s chief market strategist, said in a note. “Given that we are in the early stages of an economic recovery, monetary and fiscal policy remains favorable, the sharp rise in profits and relatively favorable valuations, we maintain our overweight in equities.”
The market is heading towards the last week of February with solid gains. The Dow and S&P 500 are up more than 5% this month, while the Nasdaq is up 6.2%. The small Russell 2000 chapter outperformed with a 9.3% gain this month.
On the front of the pandemic, the White House said it expects to ship millions of delayed doses of coronavirus vaccine this week after a winter storm disrupted logistics. Gov. Andrew Cuomo said Sunday that a New York resident has tested positive for the Covid-19 variant first identified in South Africa.
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