As investors flock to stocks that are expected to benefit from the economic recovery, the Dow Jones Industrial Average hit a record high, and stock futures were flat in overnight trading on Tuesday.
Blue chip Dow futures fell 15 points. Standard & Poor’s 500 index futures remained almost unchanged, while the Nasdaq 100 index futures fell slightly by 0.1%.
On Tuesday, although the Dow Jones Industrial Average climbed 200 points to a new high, the technology-focused Nasdaq Composite Index suffered a sell-off and fell 1.3% amid the rapid rise in U.S. Treasury yields.Highly Concerned Benchmark 10-year treasury The yield on Tuesday was as high as 1.71%, triggering a sell-off in growth technology stocks.
Chris Hussey, managing director of Goldman Sachs, said in a report that large technology stocks underperformed on Tuesday as “investors reconsidered the value of such long-term assets after rising interest rates” Based on the Standard & Poor’s 500 Index.
Investors await the release of the minutes of the Fed’s December meeting. The central bank announced that it will speed up the reduction of its bond purchase program. The Fed also predicts that it will raise interest rates three times in 2022.
Ed Al-Hussainy, senior interest rate strategist at Columbia Threadneedle, said in a report: “Due to rising inflation, the Fed is accelerating the removal of liquidity, which is likely to push up 10-year Treasury yields.” “But the central bank must be careful not to take Actions that are too aggressive, this may undermine the economic recovery and lead to economic recession.”
Wall Street strategists predict that as the Fed begins to tighten its ultra-loose monetary policy, the road to the stock market will be more bumpy. The median year-end target of the Standard & Poor’s 500 Index is currently 5,050, which is only 5% higher than Tuesday’s closing price of 4,793.54 points. According to CNBC’s strategist survey.
In terms of data, ADP will release its private employment report for December. Economists surveyed by Dow Jones estimate that a total of 375,000 jobs have been added.