Rising bond yields put pressure on Wall Street
The New York Stock Exchange ended in mixed order on Friday, as technology stocks weighed on the market due to rising bond yields. Over the week as a whole, the S&P fell by 1.26%, the Dow by 0.27 and the Nasdaq by 3.86% while the yield on 10-year bonds rose by 34 bps to reach its highest level. high level in 3 years at 2.71% and the 2-year yield increased by 10 bps to reach 2.52%.
The information technology (-1.4%), consumer discretionary (-1.0%) and communication services (-0.7%) sectors of the S&P 500 thus dragged the market lower . Stocks in the transport sector also suffered from growth concerns and negative analyst recommendations.
Conversely, the Financials (+1.0%) and Energy (+2.8%) sectors outperformed amid rising rates and oil prices (+2.0%) and the defensive sectors of Healthcare (+0.6%), Consumer Staples (+0.4%), Utilities (+0.3%) and Real Estate (+0.3%) continued their progress. Defensive stocks like UnitedHealth (+1.7%), Walmart (+0.6%) and Coca-Cola (+0.6%) even reached historic highs.
Stock markets will experience a week shortened by Good Friday, but it will be marked by several macroeconomic releases and the first company results for the first quarter. Market operators will closely monitor inflation releases on both sides of the Atlantic. Better-than-expected data would bolster expectations for monetary tightening, which should support long rates and put pressure on markets. Investors will also be watching the results of US banks including JP Morgan, Bank of America Corp, Morgan Stanley, Wells Fargo, Goldman Sachs and Citigroup.