US Stock Futures Rally After Recent Dip

U.S. stock futures began the week with an advance, following a recent relapse in the market. The S&P 500 is expected to bounce off its five-week lows as Treasury yields pull back from their highs of last week.

This comes after U.S. stocks experienced a sharp selloff on Friday, due to rising bond yields and concerns about inflation, which caused investors to take profits and move out of tech stocks that have been driving markets higher for months now. This was followed by a recovery in the late trading session on Monday morning, when benchmark 10-year Treasury notes fell below 1% again after hitting 1% earlier this month for the first time since March 2020.

The Dow Jones Industrial Average rose 0.2%, while Nasdaq Composite gained 0.5%. The S&P 500 also rose 0%, recovering most of its losses from Friday’s decline. Investors are likely looking ahead at corporate earnings reports which will be released later this week, including those from Apple Inc., Microsoft Corp., Amazon Inc., Alphabet Inc., and Facebook Inc.

Overall it appears that investor sentiment has improved slightly despite lingering uncertainty over economic growth prospects amid rising COVID cases across some parts of Europe and the Asia Pacific region. As such, it remains to be seen how long these gains can hold up going forward into the next few weeks or so before we get more clarity on the overall economic outlook globally.