S&P 500 underway for the third week of decline, led by Tech

Contracts related to Nasdaq-100 technology have been relatively flat, indicating that the sector may have difficulty regaining its opening bell position.

Shares have stalled in recent weeks as rising bond yields have called into question whether low interest rates, which have propelled higher valuations for much of last year, could continue much longer. Yields, which are rising as bond prices fall, have risen in response to expectations of an accelerated pace of growth and inflation as the economy reopens from the coronavirus pandemic.

The yield on 10-year treasury notes was approximately flat on Friday, at 1.549%, compared to 1.547% on Thursday. This marked the highest level for the reference loan cost in February last year. The recent rise in yields came after Federal Reserve Chairman Jerome Powell gave no sign that the central bank would try to stop the rise when he spoke at the Wall Street Journal Jobs Summit.

“It’s about the movements regarding the yield of the bonds. It’s all about Jerome Powell, “said Edward Park, chief investment officer at Brooks Macdonald.” There’s a huge amount of uncertainty in the market right now about the inflation we’re expecting in the short term. It’s transient or more sustained. “

Bond yields will continue to rise and stocks may remain nervous unless the Fed takes concrete steps to limit yields, according to Mr Park. “Markets are most volatile when they are not sure how monetary and fiscal policy will react.”

Technological actions have borne the brunt of the change in sentiment in recent weeks. The Nasdaq Composite Index, a closely monitored barometer for the sector, fell to its lowest level since Jan. 4 on Thursday. The index ended the day down 9.7% from the February 12 high, placing it only a short distance from the correction territory.

Before the New York bell, Gap shares rose nearly 5%. The company’s executives anticipated a return of clothing sales in the second half of the year late on Thursday, after a difficult 2020.

Broadcom shares fell nearly 2% in premarket trading after the company’s chip sales came just below Wall Street estimates. Shares of energy companies, including Exxon Mobil and Occidental Petroleum, received a boost from rising oil prices following an unexpected decision by OPEC and its partners to take over production cuts in April.

Investors will then review the February job report, which is set to be released at 8:30 AM ET. It is expected to show that the economy created 210,000 jobs last month. This would add to the signs of a slow improvement in the labor market, after data on Thursday showed that claims for unemployment have reached their lowest level in three months.

The job ratio may not affect bond yields, as the data is unlikely to affect the progress of the Biden administration’s stimulus package through the Senate, said Lyn Graham-Taylor, senior rate strategist at Rabobank. The Senate advanced the $ 1.9 trillion bill Thursday after making a series of adjustments and expects it to give its approval in a few days.

Yields will continue to rise, according to Graham-Taylor. “So far, the Fed has pointed out that it doesn’t love it, but it’s pretty comfortable with it,” he said. “In their minds, it is natural for yields to increase a little: we are not in the eye of the storm as we were.”

Oil prices rose for the day after OPEC and a Russian-led coalition of oil producers kept most of their production cuts in place, taking the market by surprise. Brent crude, the benchmark in international energy markets, rose 2.7% to $ 68.52 a barrel.

Abroad, the pan-continental Stoxx Europe 600 fell 0.2%. Among individual stocks in the region, the London Stock Exchange Group fell 8.8% after earnings lowered analysts’ forecasts in the second half and costs exceeded expectations.

Major Asian indices ended the day down. Japan’s Nikkei 225 ticked 0.2% lower, while Hong Kong’s Hang Seng index fell nearly 0.5%.

Write to Joe Wallace at [email protected]