Stock futures climb after tech rally

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Stock futures opened a little higher on Tuesday, drifting after a rally led by tech stocks recovering some of their recent declines.

Nasdaq contracts kicked off the overnight session one tick above the flat line after the index closed the steady 3.7% rise to post its best day since November. The jump came just a day after the index slipped into a correction, closing more than 10% below its February closing high. The S&P 500 also rose more than 1% on Tuesday, led by the consumer discretionary sector as Tesla stock jumped 20% for its first rise in six sessions and its biggest gain in a single session in more than a year.

While the Dow Jones finished just one tick above the flat line on Tuesday, its modest upward movement belied weeks of outperformance against the other two major indexes amid a wide rotation towards cyclical stocks and value and far from the names of growth and technology.

The factors triggering the rotation – namely, rapidly rising Treasury yields and concerns about inflation and higher rates that weigh particularly heavily on growth stocks – remain a focal point for investors. Although the benchmark 10-year Treasury yield fell on Tuesday, it is still nearly 50 basis points above last month’s levels after rising steadily. Frances Newton Stacy, chief strategy officer at Optimal Capital, told Yahoo Finance that Tuesday’s tech rally may just be a “dead cat rebound” for the Nasdaq.

Other strategists agreed that nervousness over inflation and rising rates would likely remain a central theme for investors this year.

“There is the irony that in the first year of a market recovery everyone doubts it and says how can this happen if the economy is not good, then in the second year everything it is difficult for the world to assess whether [the economy has] I got too good too quickly 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 have been disrupted by concerns about inflation and higher rates and the premature Fed tightening. And today, a little respite from this story, as rates go down a bit and investors can start thinking about longer-lived assets again. “

“It’s going to be a debate all year round, this idea of ​​inflation and rate hikes and Fed tightening,” he added. “And that could pose some challenges in the market, especially longer-lived assets. But at the end of the day, I wouldn’t sleep on growth stocks and expect structural growth companies to continue to be the long-term winners here.

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6:04 p.m. ET Tuesday: Stock futures rally

Here are the main moves in the markets at 6:04 p.m. ET:

  • S&P 500 Futures (ES = F): 3,877.00, up 3.75 points or 0.1%

  • Dow Futures (YM = F): 31,857.00, up 46 points or 0.14%

  • Future Nasdaq (NQ = F): 12,802.00, up 13.25 points or 0.1%

NEW YORK, NEW YORK - MARCH 9: The New York Stock Exchange (NYSE) is located in lower Manhattan on March 9, 2021 in New York City. The Dow Jones Industrial Average rallied more than 300 points on Tuesday as technology stocks surged and optimism over the recently passed Covid relief bill applauded investors. (Photo by Spencer Platt / Getty Images)

NEW YORK, NEW YORK – March 9: The New York Stock Exchange (NYSE) is located in lower Manhattan on March 9, 2021 in New York City. The Dow Jones Industrial Average rallied more than 300 points on Tuesday as tech stocks surged and optimism over the recently passed Covid relief bill applauded investors. (Photo by Spencer Platt / Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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