By Peter Nurse
Investing.com - U.S. stocks are seen opening mixed Tuesday, with the rotation into value stocks continuing on recovery expectations while tech companies struggle under the weight of higher Treasury yields.
At 7:05 AM ET (1205 GMT), the Dow Futures contract was up 85 points, or 0.3%, S&P 500 Futures traded flat, while Nasdaq 100 Futures dropped 70 points, or 0.5%.
The Dow Jones Industrial Average closed 0.3% higher at a new record on Monday, while the S&P 500 ended 0.1% lower and the Nasdaq Composite down 0.6%.
This mix is set to continue Tuesday, with the blue-chip Dow benefiting from increased optimism of a swift economic recovery, after a study from the Centers for Disease Control and Prevention showed that the mRNA-based vaccines of Moderna (NASDAQ:MRNA) and Pfizer/BioNTech stopped not only infection, but also transmission of Covid-19 90% in 90% of cases.
CDC data show that more than 143 million vaccine doses have been administered in the U.S., with over 93 million people having received at least one dose and more than 51 million now fully vaccinated.
Even so, CDC chief Rochelle Walensky issued a warning against restrictions and guards being lowered, expressing a sense of “impending doom” after seeing new infection and hospital admission numbers rise over the last week.
The tech-heavy Nasdaq has underperformed of late as rising bond yields have raised concerns about inflated valuations. The benchmark 10-year U.S. Treasury yield traded at 1.77%, its highest level since the start of the pandemic.
Attention will remain Tuesday on the likes of ViacomCBS (NASDAQ:VIAC) and Discovery (NASDAQ:DISCA) after they suffered heavy losses when hedge fund Archegos was forced to liquidate positions. Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) may also be in the spotlight given their links with the fund.
There are two earnings reports of note Tuesday, from online pet store Chewy (NYSE:CHWY) and fitness apparel maker Lululemon Athletica (NASDAQ:LULU) - companies that have benefited from the pandemic shutdowns as people shopped online.
Oil prices edged lower Tuesday as shipping resumed through the Suez Canal and the focus turned to the meeting of the Organization of Petroleum Exporting Countries and its allies, a grouping known as OPEC+, later this week.
The market is expecting the surge of Covid cases in Europe, not to mention the rising numbers in important emerging markets like India and Brazil, to keep the cartel from increasing supply levels to any great degree when they get together on Thursday.
Also on the supply side, U.S. crude oil supply numbers from the American Petroleum Institute are due later in the day.
U.S. crude futures traded 1.3% lower at $60.77 a barrel, while the Brent contract fell 1% to $64.25.
Elsewhere, gold futures fell 1.1% to $1,695.50/oz, while EUR/USD traded 0.3% lower at 1.1731.