Stock futures fell early Wednesday after a strong rebound in technology stocks on falling bond yields.
The futures on the Dow Jones Industrial Average have hardly changed. S&P 500 futures and Nasdaq 100 futures were down 0.19% and 0.22%, respectively.
The Nasdaq Composite rose 3.7% on Tuesday, marking its best day since November, when investors returned to popular growth names after a recent retreat. Tesla rose 19.6% for its biggest one-day pop since February 2020. Apple and Facebook each gained more than 4%, while Amazon gained 3.8%.
The tech-heavy benchmark had fallen into correction territory on Monday, or down more than 10% from its recent high.
“Corrections … create natural turning points for traders,” said Chris Larkin, chief executive officer for trading and investing products at E-Trade Financial. “Let’s not forget that less than a year ago, traders interpreted one of the biggest negative macro events in market history as a buying opportunity. So with the positive signals surrounding us today, there is little reason to change our minds.”
The snapback in technology coincided with a decline in bond yields. The 10-year government bond yield fell more than 5 basis points to 1.54% after trading at 1.62% on Monday.
Investors will monitor Wednesday’s inflation data to see if price pressures are high. Higher inflation expectations have pushed bond yields higher, putting pressure on risk-weighted assets, particularly high-growth technology stocks.
According to economists polled by Dow Jones, the consumer price index in February is expected to rise 0.4% in February, or 1.7% year over year. The data is to be published at 8:30 a.m. CET. This corresponds to an increase of 0.3% in January and an increase of 1.4% on an annual basis.
Elsewhere, House Democrats want to pass the $ 1.9 trillion coronavirus relief act on Wednesday. President Joe Biden is expected to sign the legislation in time to pass the Sunday unemployment benefit extension deadline.