Market

Dow, S&P 500 futures pull back after hitting records

Stock-index futures were lower Friday, with tech-related shares set to lead the slide as bond yields continue to rise, a day after the Dow Jones Industrial Average and S&P 500 closed at records.

What are major benchmarks doing?

The Dow
DJIA,
+0.58%

on Thursday rose 188.57 points, or 0.6%, to close at 32,485.59, building on the previous session’s record close, while the S&P 500
SPX,
+1.04%

logged its first record finish since Feb. 12, rising 1% to 3,939.34. The Nasdaq Composite
COMP,
+2.52%

jumped 2.5%.

What’s driving the market?

A rebound by tech-related shares led stocks higher Thursday, but a renewed rise in Treasury yields early Friday, with the rate on the 10-year note
TMUBMUSD10Y,
1.593%

jumping more than 8 basis points to trade above 1.61%, was set to send growth-oriented stocks back to the downside in the final session of the week.

Need to Know: Here’s how far the Nasdaq could fall if bond yields reach 2%

It’s been a volatile week for equities, including the Nasdaq, which has seen gains or losses of more than 2% in three sessions.

“We believe the recent equity volatility is likely to continue as investors seek to balance increasing optimism over growth with worries about higher inflation,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.

“But while we expect conditions to remain volatile, the most recent developments on three of the main market drivers — stimulus, pandemic news, and inflation data — point to further equity upside,” he said.

President Joe Biden on Thursday signed a $1.9 trillion COVID-19 relief package into law. In a televised speech Thursday night, Biden pledged to make all adults eligible for vaccines by May 1.

The combination of aggressive fiscal spending and progress on vaccine rollouts are seen spurring growth but also potentially stoking inflation, at least in the short term.

Analysts said technology shares may also be vulnerable to pressure after China’s market regulator on Friday said it had imposed fines on some of the country’s largest tech firms.

Also, Bloomberg reported that the Biden administration had informed some suppliers of China’s Huawei Technologies Co. that it would impose tighter conditions on previously approved export licenses, barring items for use in or with 5G devices.

Investors will get a look at U.S. inflation at the wholesale level when the February producer-price index is released at 8:30 a.m. Eastern. Economists are looking for a 0.5% rise.

The University of Michigan’s preliminary consumer sentiment index for March is due at 10 a.m. Eastern. It’s expected to rise to 78.9 from a February reading of 76.8.

Which companies are in focus?
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