Stocks Look Ready To Rebound After Yesterday’s Sell-Off

Tech Stocks Move Higher In Premarket Trading As Treasury Yields Pull Back

S&P 500 futures are moving higher as traders look ready to buy stocks after yesterday’s sell-off.

On Wednesday, U.S. inflation report shocked markets as it indicated that inflation grew by 4.2% year-over-year in April. Fed’s vice chairman Clarida stated that he was surprised by the report and but he needed to see more data. He added that he believed that the price spike was temporary but the Fed would track inflation expectations closely.

Meanwhile, inflation worries pushed the yields of 10-year Treasuries to the 1.70% level. The yields are still below highs near 1.77% that were reached back in March, but the bond market may quickly get to these levels if traders remain concerned about inflation.

The sell-off in the bond market has stopped, and yields have pulled back a bit, providing support to tech stocks. Nasdaq futures are gaining more than 0.5% in premarket trading. Most likely, tech stocks will remain very sensitive to bond market dynamics in the upcoming trading sessions.

Initial Jobless Claims Decline To 473,000

The U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reports. Initial Jobless Claims report indicated that 473,000 Americans filed for unemployment benefits in a week. Analysts expected that Initial Jobless Claims would total 490,000. Continuing Jobless Claims were 3.66 million, in line with the analyst consensus.

Interestingly, the better-than-expected Initial Jobless Claims report may serve as a bearish catalyst for the market. Traders are worried about rising inflation, and stronger job market adds to inflationary pressure.

WTI Oil Moves Below The $65 Level As Colonial Pipeline Restarts Operations

WTI oil found itself under pressure after Colonial Pipeline managed to restart its operations after the cyberattack. Some analysts have also pointed to the continued problems with coronavirus in India as the reason for the current pullback, although it should be noted that the market has previously ignored the situation in the country.

Yesterday, EIA reported that crude inventories decreased by 0.4 million barrels. Domestic oil production increased from 10.9 million barrels per day (bpd) to 11 million bpd but remained at comfortable levels for the market.

It remains to be seen whether oil will be able to gain additional downside momentum as it will likely need more negative catalysts to move lower.

For a look at all of today’s economic events, check out our economic calendar.