Traders work on the floor of the New York Stock Exchange during opening bell in New York City on August 21, 2023.
Angela Weiss | AFP | Getty Images
U.S. stock futures rose Tuesday as Wall Street tried to build momentum following positive sessions for the Nasdaq Composite and S&P 500.
Futures tied to the Dow Jones Industrial Average climbed 48 points, or 0.1%. S&P 500 and Nasdaq 100 futures both added 0.3% and 0.4%, respectively.
The Nasdaq Composite posted its biggest advance of the month during Monday’s main trading session, rising 1.6%. The S&P 500 added close to 0.7%. The two benchmarks snapped a four-day slide, and the Nasdaq notched its biggest one-day advance since August. The Dow ticked down 0.1%.
Notably, the broad market index and the tech-heavy Nasdaq were able to post gains even as the yield on the 10-year Treasury reached its highest level since November 2007, gaining about 9 basis points to trade at 4.34%. Tech shares historically struggle in a high-rate environment, making the tandem rise with yields on Monday more striking for Wall Street.
“We’re seeing a positive return in the stock market, [which] we didn’t see last week. We think rates are going to be higher for longer and maybe the stock market’s okay with it,” Katy Kaminski, chief market strategist at AlphaSimplex, told CNBC’s “Closing Bell.”
To be sure, some on Wall Street are not confident the rally can continue for much longer.
“Typically, spikes in Treasury yields expose other areas of weakness. The rise in yields will make debt refinancing even more burdensome. … Another reason yields are rising is that investors are beginning to get realistic on the Fed’s path (more rate hikes may come),” said Megan Horneman, chief investment officer at Verdence Capital Advisors.
“This is a risk to tech stocks and growth stocks with high PE multiples. Therefore, we expect additional downside in the equity market is likely,” Horneman continued.
Consumer retail giants Lowe’s and Macy’s are set to report quarterly earnings on Tuesday before the bell. Investors are keeping a close eye on Nvidia’s earnings due Wednesday. Its shares rose more than 8% Monday, making it one of the largest tech gainers. The company is largely seen as a bellwether on the AI-boom and sentiment.
On the economic data front, Wall Street will be looking toward the Philadelphia Fed’s nonmanufacturing survey, as well as the Richmond Fed’s manufacturing survey results. Existing home sales data for July is also scheduled for release Tuesday morning.
Traders are also anticipating Fed Chairman Jerome Powell’s remarks at Jackson Hole on Friday for more insight on the central bank’s inflation outlook.
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