US stock market surges after higher bond yield

US stock market surges after higher bond yield

The US stock future ascended Wednesday morning after the major average decreased due to higher bond yield.

S&P 500 and Nasdaq 100 futures increased to 0.74% and 0.83%, respectively. Dow Jones Industrial Average Futures increased by 0.5% or 164 points.

Micron shares fell after the semiconductor manufacturer failed to meet expectations of highs and lows last quarter, according to consensus estimates from Refinitiv. In other words, shares of Lululemon are up by 12% after the athletic apparel marketer beat Wall Street estimates for earnings and adjusted earnings.

The Dow Jones Industrial Average lost 0.12% or 37.83 points. The Nasdaq Composites declined by 0.45% in Tuesday’s regular session. It fell for the second day as rising yields weighed on technology stocks. The S&P 500 decreased by 0.16%.

Investors were anxious that mounting interest rates could push the economy towards a recession. Meanwhile, this month, Wall Street attempted to rebound from the area’s banking turmoil. The 2-year US Treasury yield rose above 4%, which weighed on a rate-sensitive technology stock.

Federal Reserve Deputy Chairman for Oversight Micheal Barr will speak again in Washington Wednesday morning before the House Financial Service Committee. This hearing focuses on federal regulators’ response to recent bank failures.

There were fears that money leaving the banking system for money market funds and liquidity problems at some lenders could cause lending to slow down. This slowdown, in turn, would lead to a slowdown in spending.

Maybe it’s starting to reverse now. The short-term liquidity problems are resolved, and money flows back into the banks. According to Bank of America, about $13 billion was withdrawn from money market funds Friday as banks borrowed a modest amount from the Federal Home Loan Bank system. That means the money can flow back into the bank deposit.

On the economic front, traders await the latest home sales data release after Wednesday’s opening. Economist polled by Dow Jones is expecting a 3% decline in February, compared to an 8.1% rise in the previous month.

European stock market analysis  

During the early Wednesday trade, European stock markets were buoyant, with the pan-regional Stoxx 600 index increasing by 0.5%.

  • Germany’s DAX increased by 0.42%
  • France’s CAC 40 increased by 0.65%
  • The UK’s FTSE 100 increased by 0.26%

Banks expanded the previous session’s gains, increasing by 0.5%.