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)
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.
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Before the global pandemic, it was referred to as a side hustle—a way for some individuals to make a little extra money. However, as the pandemic has changed the nature of how we work, and as consumers how we spend, the gig economy has become an essential way of life for many workers.
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