Equity futures are flat after defeat in tech stocks

Traders work on the floor of the New York Stock Exchange (NYSE) on October 15, 2021 in New York City.

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US stock futures were stable in overnight trading Monday after a tech-focused sell-off, spurred by rising bond yields, which caused the Nasdaq Composite to fall more than 1%.

The Dow futures were up 40 points. S&P 500 futures were up 0.1% and Nasdaq 100 futures were up 0.1%.

The S&P 500 and Nasdaq Composite fell Monday as the market’s growth stages reacted to a jump in bond yields. The yield on US 10-year Treasuries rose 9 basis points to above 1.62% on Monday.

Stocks initially reacted positively to the announcement that Federal Reserve chairman Jerome Powell had been nominated by President Joe Biden for a second four-year term, raising expectations that the central bank will remain on its monetary path as the economy recovers. of the pandemic and attempts to control inflation. However, towards the end of the session, the markets reversed and yields continued to climb.

On Monday, the Dow Jones Industrial Average rose 17 points, after rising more than 300 points at some point in the session. The S&P 500 fell 0.32% after hitting an intraday high during regular trading. The Nasdaq Composite fell 1.26% despite hitting an intraday record earlier in the session.

“Bullishness was heightened by the announcement that current Chairman Powell will be reappointed by President Biden,” said Jim Paulsen, chief investment strategist for Leuthold Group. “Over the past few weeks, fears grew that Lael Brainard would be chosen over Powell and she was seen as a much bigger monetary dove that had heightened inflation fears.”

While trading is likely to slow as it is Thanksgiving week and the Fed’s main decision is behind the market, investors will be looking at some economic data coming out Tuesday, including the Philly Fed. Additional data coming later in the week includes weekly unemployment claims, a GDP update, personal income and consumer confidence.

“It’s Thanksgiving week, so for the next few days the volume will probably be extremely low and there probably won’t be a lot of fireworks,” said Ryan Detrick, chief financial strategist at LPL Financial. “Still, Wednesday will bring the final Fed minutes and the Fed’s favorite measure of inflation into the PCE, so we may have something to think about before eating a lot of turkey.”

Earnings season continues Tuesday with reports from American Eagle, Best Buy and Abercrombie & Fitch ahead of the bell. Dell Technologies, GAP, HP and Nordstrom report quarterly results after the bell on Tuesday.

Investors are also juggling concerns about the coronavirus abroad. German Chancellor Angela Merkel warned the country was seeing a spike in the virus.

“While the number of Covid cases is increasing around the world, there is not much evidence that it is shutting down the US economy again as it has in the past,” Paulsen added. “For example, Thanksgiving travel forecasts are the strongest since pre-pandemic.”

US markets will be closed Thursday for Thanksgiving. The stock market closes early Friday at 1:00 PM ET.

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