Wall Streets main indexes were set to rise on Wednesday after remarks from the Federal Reserve helped calm inflation worries, while a recent dip in bond yields supported heavyweight techrelated stocks for a third straight session.
Apple Inc, Amazon.com Inc, Microsoft Corp and Alphabet Inc added between 0.3 and 0.5 in premarket trading, as the yield on the benchmark 10year Treasury note stood at more than twoweek lows of 1.5638.US
Higher yields pressure valuations for tech and other growth stocks, whose future cash flows are discounted at higher rates.
Tech has amassed multiple compressions on fears that rates would have to be raised but now that inflation has been recognized as overblown, fund managers are piling back into certain sections, said Thomas Hayes, managing member at Great Hill Capital Llc in New York.
People are realizing that there will be a major component to inflation that will be transitory and there will be some moderate inflation that will be persistent.
After fears of rising inflation roiled Wall Streets main indexes earlier this month, all eyes will be on the closely watched monthly U.S. personal consumption report, the Feds favorite inflation gauge, due later this week.
Fed vice chair Richard Clarida downplayed the effects of higher price pressures on Tuesday, voicing faith in the central banks ability to engineer a soft landing if prices continued to escalate beyond what was expected.
With the SP 500 sitting just about 1 away from its record…