Nasdaq, S&P 500 Futures Rebound In New Trading Week But Rising Bond Yields Remain A Risk

Zinger Key Points
  • As the market enters a seasonally slow period, analysts worry over whether the year's rally has petered out.
  • Volatility could be the name of the game until more clarity emerges on the rate outlook.

US stocks are coming off a lackluster week and early indications suggest a reversal in sentiment in the new trading week. While rising bond yields could be a cause of concern, the recent weakness could trigger bargain-hunting-related buying.

Cues From Past Week’s Trading:

The major averages closed the holiday-shortened week ended Feb. 24 on a markedly downbeat note, retreating to their lowest since late January. The weakness stemmed from “higher interest for longer” fears amid some data points that came in stronger than expected and the hawkish minutes of the Jan. 31-Feb. 1 Fed meeting.

U.S. Indices' Performance In Week Ended Feb. 24
Index Performance (+/-)   Value
Nasdaq Composite -3.33%   11,394.94
S&P 500 Index -2.67%   3,970.04
Dow Industrials -2.99%   32,816.92

Analyst Color:

Analysts suggest there could be more downside following the recent moderation in the year’s rally. “As we head into a seasonally weak period, with bets rising that the Fed may go with a 50bps increase instead of a 25bps in March, though still a minority opinion, the short-term market risk remains to the downside despite three straight weeks of losses,” said fund manager Louis Navellier.

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"The bears are dusting themselves off after getting sacked in January,” he added. Pondering over the recent weakness, Ryan Detrick, chief market strategist at Carson Group, said, “Is this just normal late February/early March weakness after one of the best January returns ever?” 

Futures Today

U.S. Futures' Performance On Monday
Index Performance (+/-)  
Nasdaq 100 Futures +0.62%  
S&P 500 Futures +0.51%  
Dow Futures +0.43%  
R2K Futures +0.48%  

In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY advanced 0.52% to $398.46 and the Invesco QQQ Trust QQQ rose 0.60% to $293.61, according to Benzinga Pro data.

Upcoming Economic Data:

The Commerce Department is scheduled to release the durables goods orders report for January at 8:30 a.m. EST. Economists, on average, expect durable goods orders to fall 4% month-over-month in January, reversing much of the 5.6% gain in the previous month. Core durable goods orders, which exclude the volatile transportation orders, may have inched up 0.1% following a 0.2% drop in December.

The National Association of Realtors will release its pending home sales report for January at 10 a.m. EST. The month-over-month increase of pending home sales may have slowed from 2.5% in December to 1% in January.

The Dallas Federal Reserve’s regional manufacturing business index for February is due at 10:30 a.m. EST. In January, the index came in at -8.4.

Fed Governor Philip Jefferson is scheduled to speak at 10:30 a.m. EST.

The Treasury will auction 3-month and 6-month bills at 11:30 a.m. EST.

Stocks In Focus:

  • Seagen Inc. SGEN shares climbed over 15% in premarket trading. The cancer-focused biotech may be on the radar of Pfizer Inc. PFE, according to a Wall Street Journal report.
  • Li Auto Inc. LI rose over 4% after the Chinese electric vehicle maker reported its quarterly results.
  • Shares of railroad operator Union Pacific Corp UNP rose over 5% after it said it would replace its CEO Lance Fritz
  • Tesla Inc. TSLA climbed about 2% ahead of its March 1 Investor Day.
  • Shares of Berkshire Hathaway Inc. BRKA BRKB, which reported its fourth-quarter results on Saturday, were quiet.
  • Fisker Inc. FSR, Viatris Inc. VTRS and BeiGene Ltd. BGNE are among the companies releasing their quarterly results ahead of the market open.
  • Those reporting after the close include Zoom Video Communications Inc. ZM, Workday Inc. WDAY and Occidental Petroleum Corp. OXY.

Commodities, Bonds, Other Global Equity Markets:

Crude oil futures were pausing on Monday after advancing strongly in the previous session. A barrel of WTI-grade crude oil traded up about 0.09% at $76.39. Meanwhile, the yield on the benchmark 10-year U.S. Treasury remained high at 3.959%.

The Asia-Pacific markets fell across the board on Monday, tracking Wall Street’s dismal performance on Friday, while European stocks were solidly higher in late morning trading.

Read Next: Tesla Bet Upped By 160%, Apple Dumped And More: How Canada's Largest Pension Fund Shuffled Its Q4 Portfolio

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Posted In: EarningsNewsFuturesPreviewsSmall CapTop StoriesEconomicsFederal ReservePre-Market OutlookMarketsTrading IdeasDow IndustrialsLouis NavellierNASDAQ CompositeRyan DetrickS&P 500 Index
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