Stock futures lower as rising bond yields keep pressure on tech shares
March 8, 2021
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March 9, 2021Despite a sluggish start, the New York Stock Exchange concluded sharply on Friday thanks to good US employment figures, at the end of a week marked by the rise in US 10-year bond rates.
According to final results at the close of Wall Street, the Dow Jones index rose 1.85% to 31,496.30 points. The technology-intensive Nasdaq rose 1.55% to 12,920.15 points and the S&P 500, more representative of the US market, jumped 1.95% to 3,841.94 points.
“We saw a nice U-turn today,” noted Peter Cardillo of Spartan Capital Securities as Wall Street had started in scattered order, the Nasdaq especially reflecting concerns around a rise in bond rates.
Over the week, the Nasdaq remained down 2.06%, the Dow Jones advanced 1.85% and the S&P 500 0.81%.
The strong job creations in February, at 379,000, which is three times more than in January, as well as the drop in the unemployment rate to 6.2%, “constituted a good report on the labor market, even if we are still far from full employment, ”added the expert.
These jobs were created mainly in bars and restaurants, but also in other activities related to recreation and accommodation, as well as in health services, retail, and manufacturing.
“If bond yields were to stabilize where they are,” that is to say a little above 1.50% for 10-year notes, “it can be safely said that the market has finished falling. back off, ”added Cardillo.
Many observers have analyzed the progression of bond yields, which reached a one-year high in the morning at 1.62%, as the anticipation of inflation in the United States with the recovery of the economy and the vaccination campaign.
Such a scenario could push the Federal Reserve to modify its asset purchases and raise its key rates.
But his boss, Jerome Powell, assured again this week that he was not considering this option in the short term, considering a possible rise in prices as provisional.
Among the actions of the day, Tesla continued its descent (-3.78%), wiping out more than $ 200 billion in capital appreciation in one month, while GM, which announced the construction of a second factory of batteries in the United States, soared.
All 11 sectors of the S&P 500 finished in the green, led by energy as oil prices hit a two-year high.
