Stock futures opened slightly higher on Tuesday after a tech-led recovery that bounced back from some of its recent declines.
Nasdaq contracts started early in the morning a mark above the flat line, after the index closed at a regular high of 3.7%, registering its best day since November. The jump came just a day after the index slid to a correction, closing more than 10% below February’s record high. The S&P 500 also rose more than 1% on Tuesday, led by the consumer discretionary sector, with Tesla shares rising 20% to its first rise in six sessions and its biggest gain in a single session in more than one year.
Although the Dow ended just a tick above the flat line on Tuesday, its modest bullish movement belied weeks of higher performance compared to the other two main indices amid a broad rotation in cyclical and value stocks and far from names growth and technology.
The factors that trigger rotation – namely, the rapid rise in Treasury yields and concerns about inflation and higher rates that weigh particularly on growth stocks – remain a focal point for investors. Although the 10-year Treasury yield fell on Tuesday, it is still almost 50 basis points above last month’s levels after a rapid upward march. Frances Newton Stacy, chief strategy officer at Optimal Capital, told Yahoo Finance that the technology-led recovery on Tuesday may have been just a “dead cat jump” for Nasdaq.
Other strategists agreed that nervousness about inflation and rising rates is likely to remain a central theme for investors this year.
“There is an irony that in year one of the market recovery everyone doubts and says how this could be happening if the economy is not good, and then in year two everyone struggles to assess whether [the economy has] it was too good fast and it’s too hot “, Brian Levitt, global market strategist at Invesco, told Yahoo Finance on Tuesday. “And so the last few days have been the last story: markets being disturbed by concerns about inflation and higher rates and the Fed’s premature tightening. think about long-term assets again. “
“It is going to be a debate all year, this idea of inflation and higher rates and tightening of the Fed,” he added. “And that can pose some challenges to the market, particularly long-term assets. But in the end, I wouldn’t sleep with growth stocks and I hope that structural growth companies will continue to be the long-term winners here.”
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6:04 pm ET Tuesday: Stock Futures Mark High
Here are the main changes in the markets as of 6:04 pm (Eastern Time):
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S&P 500 Futures (ES = F): 3,877.00, an increase of 3.75 points or 0.1%
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Dow Futures (YM = F): 31,857.00, up 46 points or 0.14%
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Nasdaq Futures (NQ = F): 12,802.00, an increase of 13.25 points or 0.1%
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Emily McCormick is a reporter at Yahoo Finance. Follow her on Twitter: @emily_mcck
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