Traders on the floor of the New York Stock Exchange.
US stock index futures were slightly lower in early morning trading on Tuesday after all three major averages rose during Monday’s regular trading hours.
Futures contracts linked to the Dow Jones Industrial Average lose 107 points. S&P 500 futures and Nasdaq 100 futures both traded in slightly negative territory.
The Dow ended the session 103 points higher on Monday, up 0.32%. The S&P 500 broke a two-day losing streak, gaining 0.7%. The Nasdaq Composite was the relative outperformer, rising 1.23% for the fifth time in six sessions.
The gains came as 10-year government bond yields fell from a 14-month high last week.
“While the surge in returns has created volatility, we don’t expect it to break the stock rally,” said Mark Haefele, chief investment officer, UBS Global Wealth Management. “We believe that rising yields reflect growth optimism and expectations for higher inflation.”
On Tuesday, Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen will make their first joint appearance before the US House Committee on Financial Services. The discussion will focus on monitoring the Treasury and Federal Reserve’s pandemic response.
In prepared comments released ahead of the hearing, Powell noted that the recovery is picking up momentum before adding that there is still a long way to go.
“The recovery has progressed faster than widely expected and appears to be strengthening. This is in large part due to the unprecedented fiscal and monetary policies that have been instrumental in helping households, businesses and communities,” he said in the prepared comments.
“But the recovery is far from over, so we at the Fed will continue to provide the economy with the support it needs while it lasts,” he added.
Tuesday also marks the one-year anniversary of the market bottom, when the coronavirus pandemic caused stocks to fall 30% at the fastest pace in history.
Since the intraday low on March 23, both the S&P 500 and the Dow are up 80%. The Nasdaq Composite is up 93% while the Russell is up 135% in 2000.
“The circle is now complete as stocks have rallied rapidly and hit new highs around the world as the economy recovers at a record pace,” said Ryan Detrick, chief market strategist at LPL Financial.
“This bull has got off to an amazing start, but it’s important to remember that it’s still young. While volatility pickups would be normal during this period of a strong bull, we think appropriate investors should buy the dip in Vaccine distribution, fiscal and monetary stimulus and a robust economic recovery have our confidence high, “he added.