The Nasdaq and the S&P 500 were headed for a higher opening on Monday as technology stocks looked set to rebound from a recent pullback that was sparked by a surge in bond yields.
Heavyweight Tesla Inc rose almost 3% to $676 in pre-market trading as Cathie Wood’s Ark Invest said it expects electric-car maker’s share price to hit $3,000 by 2025. The $26.6 billion ARK Innovation ETF counts Tesla as its largest holding.
A sharp run-up in Treasury yields since mid-February has dictated the course of equities trading, weighing on high-flying tech stocks.
Thomas Hayes, chairman at Great Hill Capital in New York said “tech will get a bid if yields moderate and that’ll probably be the theme for the next couple of months.”
Futures tied to the tech-heavy Nasdaq 100 climbed nearly 0.9% to start the week as the benchmark 10-year Treasury yield dipped to 1.688% from a near fourteen-month high. The index is still down more than 6% from its Feb. 12 record close.
Nonetheless, the S&P 500 and the Dow clinched all-time highs as early as last week on bets that stimulus and vaccine rollouts would lead to a strong rebound in the U.S. economy.
Kansas City Southern jumped almost 17% after Canadian Pacific Railway Ltd agreed to acquire the railroad operator in a $25 billion cash-and-stock deal to create the first railway spanning the United States, Canada and Mexico.
At 08:26 a.m. ET, Dow E-minis were down 19 points, or 0.06%, S&P 500 E-minis were up 7.25 points, or 0.19% and Nasdaq 100 E-minis were up 88.25 points, or 0.69%.
Intel Corp, Microsoft Corp and Apple Inc led gains among Dow components in trading before the bell.
Big U.S. lenders including Goldman Sachs, Citigroup and Bank of America, which have enjoyed a rally on brightening economic prospects, slipped about 1% each.
The iShares MSCI Turkey ETF sank almost 18% as President Tayyip Erdogan’s decision to oust a hawkish central bank governor sparked fears of a reversal of recent rate hikes.