US futures fell on Monday, indicating losses for major indices, as rising bond yields raised concerns that technology stocks seem too expensive.
S&P 500 futures fell 0.7%, indicating that the broad market size will continue to decline after the opening bell in New York. The benchmark fell 0.7% last week. Contracts related to the powerful Nasdaq-100 technology fell 1.3%, and Dow Jones Industrial Futures fell 0.6% lower.
Investors bet that the launch of vaccines and the $ 1.9 trillion stimulus package proposed by President Biden will accelerate the economic recovery later this year.
These expectations, combined with concerns about rising inflation and the prospect of rising interest rates earlier than expected, have contributed to a sell-off in US government bonds in recent weeks. The fall in bond prices has led to rising yields, which have raised concerns that high-flying stocks are beginning to look less attractive than risk-free assets.
“As yields increase, there is a greater demand for [government bonds] relative to other assets, ”said Hani Redha, portfolio manager at PineBridge Investments. “How much are you willing to pay for shares? If you get a very low bond yield, you should be willing to pay a higher amount for the shares. But that is starting to change as bond yields rise. ”