A man wearing a protective mask looks at an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 26, 2021, in Tokyo. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Eugene Hoshiko) A man wearing a protective mask walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 26, 2021, in Tokyo. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Eugene Hoshiko) A man wearing a protective mask stands in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 26, 2021, in Tokyo. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Eugene Hoshiko) A man wearing a protective mask walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Friday, Feb. 26, 2021, in Tokyo. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Eugene Hoshiko) A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 26, 2021. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Ahn Young-joon) A currency trader walks near screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 26, 2021. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Ahn Young-joon) Currency traders watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 26, 2021. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Ahn Young-joon) A currency trader runs at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Feb. 26, 2021. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Ahn Young-joon) An electronic stock board shows Japan's Nikkei 225 and New York Dow indexes at a securities firm Friday, Feb. 26, 2021, in Tokyo. Asian shares skidded Friday after rising bond yields triggered a broad sell-off on Wall Street that erased the markets gain for the week and handed the Nasdaq composite index its steepest loss since October. (AP Photo/Eugene Hoshiko)
Stocks were mostly higher in early trading Friday as technology companies, which had been beaten down in recent days, started to recover.
Investors continued to watch the bond market, where Treasury yields were declining, as well as Washington, where Congress is expected to vote on President Joe Biden's stimulus package.
The S&P 500 index was up 0.3% as of 9:50 a.m. Eastern. The Dow Jones Industrial Average was down 0.3% and energy companies weighed on that index. Meanwhile the technology-heavy Nasdaq rose 0.9%.
A sell-off on Wall Street Thursday picked up speed when the yield on the 10-year U.S. Treasury note rose above 1.5%, a level not seen in more than a year and far above the 0.92% it was trading at only two months ago. That move raised the alarm that yields, and the interest rates they influence, will move higher from here.
Bond yields were easing off of their multi-week climb, which was helping out the stock market. The yield on the 10-year U.S. Treasury note was 1.47%, down from its earlier highs.
The recent rise in bond yields reflects growing confidence that the economy is on the path to recovery, but also expectations that inflation is headed higher, which might prompt central banks eventually to raise interest rates to cool price increases. Rising yields can make stocks look less attractive relative to bonds, which is why every tick up in yields has corresponded with a tick down in stock prices.
Technology stocks have been impacted more than the broader market by the rise in bond yields. Technology stocks tend to trade at higher valuations than the overall market. Investors are also betting that with vaccinations, the coronavirus pandemic may be coming to an end which would pivot consumer behavior away from online-only shopping.
Apple, Microsoft, Amazon and Facebook shares were all up 1% or more in early trading. All four of those companies trade on the Nasdaq.
In Washington, Democrats in Congress are preparing to move forward with President Biden's $1.9 trillion stimulus package, with a vote in the House of Representatives planned for Friday. The Senate could vote on the package as early as next week.
The stimulus bill would include yet another round of one-time payments to most Americans, including an expansion of other refundable tax credits like the child tax credit, as well as additional aid to state and local governments to combat the pandemic.
Before you consider Microsoft, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Microsoft wasn't on the list.
While Microsoft currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Growth stocks offer a lot of bang for your buck, and we've got the next upcoming superstars to strongly consider for your portfolio.
Get This Free Report