Wall Street’s major averages were set for a muted open on Tuesday after a strong start to March as investors closely monitored the bond market as well as progress on the next round of fiscal stimulus.
The S&P 500 ended 2.4% higher on Monday, its best day since June as markets cheered approval of a third COVID-19 vaccine in the United States and the U.S. House of Representatives’ green light for a $1.9 trillion coronavirus relief package.
The U.S. Senate will start debating President Joe Biden’s relief bill this week when Democrats aim to pass the legislation through a maneuver known as “reconciliation,” which would allow the bill to pass with a simple majority.
“Markets are reacting to the huge positive spike in the previous session, while investors are wondering if good news is bad news over concerns of higher inflation due to huge government spending plans,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in New York.
At 8:20 a.m. ET, Dow E-minis were down 43 points, or 0.14% and S&P 500 E-minis were down 6 points, or 0.15%. Nasdaq 100 E-minis were down 16.25 points, or 0.12%.
The U.S. bond market has stabilized since a selloff sent the benchmark 10-year Treasury yield to a one-year high last week, but continue to remain elevated, sparking fears over high valuations in the stock market and emerging as a competitive alternative to equities.
Later in the week, investors will focus on ISM’s service sector survey as well as the monthly U.S. jobs report to ascertain the economic health.
Zoom Video Communications Inc jumped about 10% after the company forecast current-quarter revenue above estimates, as it expects millions of people to continue using its video-conferencing platform.
Target Corp gained 0.8% after it reported a 21% jump in holiday-quarter revenue, much higher than analysts’ estimates, as same-day delivery and store pick-up services helped fulfill robust demand for home goods, toys and groceries during the pandemic.
Reporting by Medha Singh in Bengaluru; Editing by Maju Samuel