Wall Street set to rebound on boost from tech stocks

(Reuters) -A rebound in beaten-down technology shares set U.S. stock indexes on course to open higher on Wednesday after concerns about inflation and rising Treasury yields sparked one of Wall Street’s worst selloffs this year.

FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri

Shares of heavyweights Inc, Facebook Inc, Microsoft Corp, Apple and Google-parent Alphabet Inc rose between 0.5% and 0.8% in premarket trading.

Rate-sensitive tech stocks got a boost as 10-year U.S. Treasury yields fell after jumping 20 basis points on signals from the Federal Reserve that it could tighten its monetary policy in the months ahead. [US/]

“It’s all coming down to the 10-year yield, the rate of change. The reason you’re seeing a little relief (today) is because it’s not going straight up, it’s taking a bit of a breather and the market likes that,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

“The only game in town right now is going to be equities until those yields go up more materially and people can earn something in fixed income. There’s nothing to compete with equities and that’s why you’re seeing every 3% to 5% dip bought.”

Oil firms including Exxon Mobil and Chevron Corp fell 0.3% as a rally in crude prices petered out. Still, the S&P energy sector has outperformed so far this week with a 3.9% gain and is on track for its best monthly performance since February.

Wall Street ended sharply lower on Tuesday in a broad sell-off, with the benchmark S&P 500 index logging its biggest one-day percentage drop since May and the Nasdaq posting its worst daily selloff since March.

The S&P 500 index is also set to break its seven-month winning streak as fears about China Evergrande’s default, potential higher corporate taxes and a sooner-than expected tapering of monetary support by the Federal Reserve clouded investor sentiment in what is usually a seasonally weak month.

At 7:59 a.m. ET, Dow e-minis were up 138 points, or 0.4%, S&P 500 e-minis were up 23.5 points, or 0.54%, and Nasdaq 100 e-minis were up 106.25 points, or 0.72%.

Meanwhile, U.S. Senate Republicans blocked a bid by President Joe Biden’s Democrats to head off a potentially crippling U.S. credit default for a second day in a row, as partisan tensions rattled an economy recovering from the COVID-19 pandemic.

JPMorgan Chase & Co Chief Executive Jamie Dimon also cautioned a U.S. default would be a “potentially catastrophic” event.

Among stocks, Boeing Co rose 2.6% after it said 737 MAX test flight for China’s aviation regulator last month was successful and the planemaker hopes a two-year grounding will be lifted this year.

Micron Technology Inc slipped 3.4% after the chipmaker forecast current-quarter revenue below analysts’ expectations and warned that shipments for its memory chips were set to dip in the near term.

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