(Reuters) – Major US stock indices were headed for a bullish opening on Tuesday, with Nasdaq set to rebound after a strong sale in the previous session, with US bond yields retreating and investors buying shares defeated technologies.
Tesla Inc advanced about 6%, while Apple Inc, Amazon.com Inc, Facebook Inc and Microsoft Corp jumped about 2% each in early trading.
Signs that a $ 1.9 trillion coronavirus relief package was approaching final approval spurred yields on Monday, prompting Nasdaq to close more than 10% below its December 12 closing high. February, which confirmed a correction.
Yields on 10-year US Treasury bonds decreased to 1.54%, after hovering close to the 13-month highs of 1.613% in the previous session. Longer-term yields have soared in the past month, as investors see a faster-than-expected economic recovery and higher inflation.
Higher yields can weigh even more on technology stocks and growth with high valuations, as they threaten to erode the value of your long-term cash flows.
“Technology stocks are delayed for some kind of recovery after the fall they have had so far, with most investors maintaining a positive outlook on technology stocks in the medium and long term,” said Michael Sheldon, investment director at RDM Financial in Westport, Connecticut.
“The potential obstacle for the market is if interest rates rise further from this point in the short period … since they have risen very quickly in a very short time.”
At 8:17 am ET, Dow E-minis rose 110 points, or 0.35%, S&P 500 E-minis rose 35.75 points, or 0.93% and Nasdaq 100 E-minis rose 273.5 points, or 2.22%.
The rise in earnings has accelerated the rotation of “stay-at-home” winners for stocks prepared to benefit from an economic reopening, helping the Dow reach an intraday record on Monday.
The global economic outlook has improved as vaccine launches pick up speed and the United States launches a vast new stimulus package, the Organization for Economic Cooperation and Development said, following the policy forum’s predictions.
Major American creditors, including Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co and Goldman Sachs, fell about 1% a day after the bank index jumped to a new 14-year peak.
GameStop rose 11% to $ 215.95, taking advantage of the more than 40% rise on Monday based on the video retailer’s e-commerce strategy and speculation that retail investors will pour stimulus checks into markets.
Reporting by Shashank Nayar and Medha Singh in Bengaluru; Editing by Maju Samuel