Futures contracts tied to the major U.S. stock indexes traded lower early Friday as the 10-year yield jumped, rekindling fears that rising rates will take the comeback momentum out of equities, especially tech names.
Futures for the Dow Jones Industrial index moved doggedly upward 72 points, or 0.2%, to 32,440.
Futures for the S&P dropped 11.5 points, or 0.3%, at 3,915.75.
Futures for the NASDAQ Composite plummeted 183.25 points, or 1.4%, to 12,856. Before Friday’s open, the NASDAQ is up 3.7% on the week and is outperforming both the S&P 500 and the Dow over the period.
A quick rise in bond yields put pressure on the NASDAQ names earlier in March as investors shifted toward economically sensitive, cyclical stocks. Sharp increases in interest rates can put outsized pressure on high-growth tech stocks as they reduce the relative value of future profits.
That trend appeared to partially reverse on Thursday as bond yields calmed. But on Friday morning, the concern returned. Shares of Tesla and Twitter declined in pre-market trading. Netflix was also lower.
Signs that the U.S. economy may be set for a healthy 2021 were plentiful on Thursday after Biden signed his much-anticipated $1.9 trillion coronavirus relief package into law. The plan will send direct payments of up to $1,400 to many Americans, and will also put nearly $20 billion into COVID-19 vaccinations and $350 billion into state, local and tribal government relief.
Biden announced Thursday evening that he would direct states to make all adults eligible for the vaccine by May 1 in his first primetime address as president.
Overseas, In Japan, the Nikkei 225 rocketed 1.7% Friday, while in Hong Kong, the Hang Seng stumbled, losing 2.2%.
Oil prices gave back 22 cents to $65.80 U.S. a barrel.
Gold prices dipped $23.90 to $1,698.70 U.S.