A trader on the floor of the New York Stock Exchange.

Source: The New York Stock Exchange

Stock futures fell in early morning trading Monday after the S&P 500 posted its first week of losses in three years.

The futures on the Dow Jones Industrial Average fell 228 points. S&P 500 futures and Nasdaq 100 futures also traded in negative territory.

The futures move came after the S&P 500 and Nasdaq Composite posted a two-week winning streak last week, losing 0.7% and 1.6% respectively. The blue-chip Dow was up 0.1% over the same period, supported by Caterpillar and JPMorgan.

Some equity investors have been increasingly concerned about rapidly rising bond yields over the past few weeks as they could hurt especially high-growth companies that rely on easy borrowing while reducing the relative attractiveness of stocks.

The yield on 10-year government bonds rose last week by 14 basis points to 1.34%, the highest level since February 2020. So far, the key rate has risen by 25 basis points this month.

“This movement in returns should be watched closely by investors,” said Matt Maley, chief marketing strategist at Miller Tabak, in a note. “Just because long-term interest rates are extremely low on a historical basis, we don’t think they need to rise as much as most experts believe … before they affect the stock market.”

Meanwhile, many on Wall Street believe the rise in bond yields is a sign of growing confidence in the economic recovery and stocks should be able to absorb higher interest rates on strong gains.

“We don’t see the recent surge in returns as a threat to the bull market,” said Keith Lerner, chief market strategist at Truist, in a note. “Given that we are in the early stages of an economic recovery, monetary and fiscal policies remain supportive, and the strong recovery in earnings and cheap relative valuations maintain our overweight position on equities.”

The market goes into 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-cap Russell 2000 outperformed this month, up 9.3%.

On the pandemic, the White House said it expects to ship millions of delayed coronavirus vaccine doses this week after a widespread winter storm disrupted logistics. Governor Andrew Cuomo said Sunday that a New York resident tested positive for the variant of Covid-19, which was first identified in South Africa.

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