Traders work on the floor of the New York Stock Exchange (NYSE) on October 15, 2021 in New York City.
Spencer Platt | Getty Images
U.S. equity futures were flat in trading overnight after a tech-driven sell-off spurred by rising bond yields that saw the Nasdaq Composite fall more than 1%.
Dow futures rose 40 points. S&P 500 futures gained 0.1% and Nasdaq 100 futures gained 0.1%.
The S&P 500 and Nasdaq Composite fell on Monday as pockets of market growth reacted to higher bond yields. The 10-year US Treasury yield climbed 9 basis points to exceed 1.62% on Monday.
Stocks initially reacted positively to the news that Federal Reserve Chairman Jerome Powell has been appointed for a second four-year term by President Joe Biden, causing the central bank to stay on course. monetary policy as the economy recovers from the pandemic and attempts to fight inflation. However, the markets reversed course towards the end of the session and rates continued to rise.
On Monday, the Dow Jones Industrial Average rose 17 points, after rising more than 300 points at one 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 an intraday high earlier in the session.
“The optimism has been heightened by the announcement that current Chairman Powell will be reappointed by Chairman Biden,” said Jim Paulsen, chief investment strategist for Leuthold Group. “Fears have built up in recent weeks that Lael Brainard might be chosen over Powell and she was seen as a much bigger money dove that had heightened fears of inflation.”
While trade is likely to slow because it’s Thanksgiving week and the Fed’s main decision is behind the market, investors will be watching some economic data coming out on Tuesday, including the Philly Fed. Additional data released later in the week includes weekly jobless claims, a GDP update, personal income and consumer confidence.
“It’s Thanksgiving week, so the next few days will likely be extremely low in volume and likely not have a lot of fireworks,” said Ryan Detrick, chief financial strategist at LPL Financial. “Nonetheless, Wednesday will bring the Fed’s final minutes and the Fed’s preferred measure of inflation in the PCE, so we might have something to think about before we go out and eat a lot of turkey.”
The earnings season continues on Tuesday with reports from American Eagle, Best Buy and Abercrombie & Fitch before the bell. Dell Technologies, GAP, HP and Nordstrom publish their quarterly results after the bell on Tuesday.
Investors are also juggling concerns about the coronavirus overseas. German Chancellor Angela Merkel has warned the country is witnessing a peak in the virus.
“Although the number of Covid cases is on the rise worldwide, there is not much evidence that it is once again crippling the US economy as in the past,” added Paulsen. “For example, travel forecasts for the Thanksgiving holiday are the strongest since before the pandemic.”
US markets will be closed for the Thanksgiving holiday on Thursday. The stock market closes early at 1 p.m. ET on Friday.