The 10-year U.S. Treasury yield started the week lower as stock futures rose in pre-market trading Monday.
The yield on the benchmark 10-year Treasury note fell to 1.429%, while the yield on the 30-year Treasury bond climbed to 2.203%. Yields move inversely to stock prices.
Dow futures rose 314 points in pre-market trading Monday. S&P 500 futures and Nasdaq 100 futures also both traded in positive territory.
Boosting investor sentiment was news over the weekend that the Centers for Disease Control and Prevention voted unanimously to recommend the use of Johnson & Johnson’s (NYSE:JNJ) one-shot Covid-19 vaccine for people 18 years of age and older. The company expects to ship four million doses initially.
Last week, stocks were pressured by rising interest rates. Higher interest rates can threaten the dominance of equities as bonds are viewed as less risky. The yield on the benchmark 10-year got as high as 1.6% on Thursday but retreated to 1.41% last Friday.
The Dow Jones Industrial Average lost 1.7% and S&P 500 index lost 2.5% between Monday and Friday last week.
The technology-heavy NASDAQ Composite dropped more than 4% for the week, suffering its worst one-day selloff since last October on Thursday. Technology companies rely on being able to borrow money for a low rate to invest in future growth.
Despite last week’s downturn, the major stock averages rose for the month of February, bolstered by a strong earnings season, positive news on the vaccine front and hopes of another stimulus package from lawmakers in Washington, D.C.
The Dow gained 3.15% for its third positive month in four in February. The S&P 500 gained 2.61% and the NASDAQ gained nearly 1% for its fourth positive month in a row.
