Wall Street is expected to open higher as technology liquidation cools

(Reuters) – The main Wall Street indices were scheduled to open higher on Wednesday as defeated growth stocks found relief after falling for six consecutive sessions, while a rise in Tesla shares helped to reverse the falls to futures by tracking the Nasdaq index.

Microsoft Corp, Alphabet Inc, Amazon.com Inc and Apple Inc reversed the falls to rise between 0.2% and 1.0% in trades before the bell.

Tesla Inc gained 3.8% after the Ark Invest funds of major investor Cathie Wood bought an additional $ 171 million in company shares after a sharp drop in shares in the electric car maker.

Markets were also reassured by comments from Federal Reserve Chairman Jerome Powell, who on Tuesday rejected suggestions that a loose monetary policy could trigger inflation.

“There may be a small drop in the market and Powell believes inflation is much smoother,” said Thomas Hayes, president of the hedge fund Great Hill Capital LLC in New York.

“There is also the view that if she (Wood) is willing to take the riskiest stock in the face of what Powell said yesterday, then it might be safe to get back in the water.”

The S&P 500 growth index, which houses most of the shares related to rising technology, has dropped more than 6% in the last six days due to evaluation issues.

Technology stocks are particularly sensitive to rising yields, as their value depends heavily on future earnings, which are discounted more deeply when bond returns increase.

Value-oriented stocks have taken a small leap recently, hoping for a faster economic recovery. The S&P 500 value index rose for three consecutive days.

Banks, industrial and energy stocks rose, with Bank of America, Caterpillar Inc and Chevron Corp gaining between 0.5% and 1.1%.

At 8:21 am ET, the Dow e-minis rose 18 points, or 0.06%, S&P 500 e-minis rose 8.75 points, or 0.23%, and the Nasdaq 100 e-minis rose 46 points, or 0.35%.

The main Wall Street indices fell from record highs last week due to concerns about a potential increase in inflation, while Treasury yields have remained high in the recent past due to expectations of an economic recovery supported by vaccines and stimuli.

Lowe’s Cos Inc increased 1.9% after exceeding quarterly sales estimates in the same store, benefiting from the sustained demand from people who remodeled their homes during the COVID-19 pandemic.