Stock futures are flat after the Dow slid off record highs
US stock futures were flat overnight on Tuesday after the Dow Jones Industrial Average slid from record levels on fears of rising interest rates.
Dow futures only rose 12 points. S&P 500 and Nasdaq 100 futures also moved around the flatline.
Key averages were put under pressure on Tuesday by rising interest rates as 10-year US Treasury yields hit a 14-month high of 1.77%. Bond yields have risen this year due to the strong adoption of Covid-19 vaccines and expectations of a broad economic recovery.
The Dow Jones Industrial Average lost more than 100 points and fell from a record high on Monday. The S&P 500 fell around 0.3%.
The Nasdaq Composite was down about 0.1% as Facebook, Amazon, Apple, Netflix and Microsoft all fell. Big tech stocks are particularly sensitive to rising interest rates as they rely on borrowing cheap money to invest in their future growth.
Reopening plays like airlines and cruise lines on Tuesday after consumer confidence data surpassed expectations.
“Stocks started the day lower trading, wondering if the Archegos fiasco was just a one-off event or a contagion. Selling pressure mounted as bond yields hit new highs for the year and weighed on tech stocks again,” said Jim Paulsen, Chief Investment Strategist at the Leuthold Group.
“However, discussions about another upcoming stimulus package and a surge in consumer confidence reminded investors that the global economy is rebounding at an incredible rate, which is today fueling cycles, small-cap stocks and most international markets,” added Paulsen.
Investors await details of President Joe Biden’s infrastructure plan on Wednesday. The spending package could cost more than $ 3 trillion.
ADP’s private salary data is released Wednesday morning at 9:15 a.m. Economists polled by Dow Jones expect 525,000 private jobs to be created in March, well above the 171,000 in February.
ViacomCBS and Discovery recouped some of the biggest losses from recent sessions after Archegos Capital Management was forced to liquidate its media stocks position. Some of the banks involved in the margin call last week rose on Tuesday.
Subscribe to CNBC PRO for exclusive insights and analysis, as well as live business day programs from around the world.