Stocks Pull Back At The Start Of The WeekRising Treasury yields put pressure on tech stocks.
Senate Passes Coronavirus Aid Bill
The huge $1.9 trillion coronavirus aid bill was approved by Senate on the weekend, and Democrats expect that U.S. President Joe Biden will sign it by March 14.
The new aid package includes $1,400 stimulus payments, as well as extra unemployment assistance of $300 per week.
The market remains worried about higher inflation, and Treasury yields continue to move higher. Currently, the yield of 10-year Treasuries is trying to settle above 1.60% while the yield of 30-year Treasuries is attempting to get above 2.31%.
Rising yields continue to provide support to the U.S. dollar which is gaining ground against a broad basket of currencies. Meanwhile, gold and silver remain under pressure as higher yields and stronger dollar serve as bearish catalysts for precious metals.
Tech Stocks Are Under Pressure At The Start Of The Week
Nasdaq futures are down by about 1.00% in premarket trading as rising Treasury yields continue to put pressure on high-flying tech stocks. S&P 500 futures are down by about 0.3% as cyclical stocks provide some support.
The market will not be able to move higher without tech stocks so traders should keep an eye on this market segment. If the tech segment remains under pressure, S&P 500 will likely drift lower.
It remains to be seen whether worries about high inflation will put additional pressure on tech stocks in the longer-term as the new stimulus package will provide material support to the economy and should ultimately improve the market’s mood.
Oil Pulls Back Despite Rising Tensions In The Middle East
Yemen’s Houthis have recently attacked Saudi Arabia’s oil facilities, pushing WTI oil to multi-month highs of $67.94. However, oil lost momentum and is currently trying to settle below the $66 level.
It looks like oil traders decided to take some profits off the table after they learned that Houthis failed to deal any material damage to Saudi Aramco’s facilities.
While oil prices have pulled back from their recent highs, oil-related equities will likely be active at the start of today’s trading session and have a decent chance to continue their upside trend.
For a look at all of today’s economic events, check out our economic calendar.