Wall St set to open lower as spike in yields pressure tech stocks By Reuters

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© Reuters. FILE PHOTO: A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City

By Devik Jain and Medha Singh

(Reuters) -Wall Street’s main indexes were set to open lower on Tuesday as a rise in U.S. bond yields hit heavyweight tech-related stocks, while undervalued banks and industrial stocks that stand to benefit from a re-opening economy edged higher.

slipped 0.6% as Facebook Inc (NASDAQ:), Amazon.com (NASDAQ:), Apple Inc (NASDAQ:), Netflix Inc (NASDAQ:) and Microsoft Corp (NASDAQ:) dropped between 0.2% and 0.7% premarket, as hit a 14-month high. [US/]

The tech-heavy Nasdaq, which houses the “high-flying” FAANG stocks, is set for its first monthly loss since November as rosy economic projections lifted demand for undervalued banks, energy, materials and industrial stocks.

A rise in yields since last month has particularly hit tech stocks which often have a low-rate environment heavily baked into their high valuations.

“We are going through a period where people are adjusting to slightly higher rates,” said Jon Maier, chief investment officer at Global X ETFs in New York.

“An infrastructure plan would benefit the sectors that were typically locked during the pandemic. Materials, industrials are the areas that would benefit from additional spending.”

On Wednesday, President Joe Biden will unveil more details about the first stage of his infrastructure plan, which could be worth as much as $4 trillion.

The Nasdaq is still about 7% below its all-time closing high, while bets on a speedy economic recovery driven by vaccine distributions and unprecedented stimulus has helped the and the Dow notch record closing highs last week.

The three main indexes recouped most of their losses from session lows on Monday as investors took heart from signs that the impact from the fall of a U.S. hedge fund was limited to a handful of stocks and didn’t ripple out to broader markets.

“The incredible amount of leverage in the system is a concern and more headlines like this to come on … shake investor confidence,” said John Traynor, chief investment officer at People’s United Advisors.

At 8:24 a.m. ET, Dow E-minis were down 8 points, or 0.02%, S&P 500 E-minis were down 11.5 points, or 0.29% and E-minis were down 84.5 points, or 0.65%.

Banks and industrial stocks including JPMorgan Chase & Co (NYSE:), Morgan Stanley (NYSE:) and Boeing (NYSE:) Co added between 0.2% and 0.7%.

prices gained about 2.6% after Reuters reported that PayPal Holdings Inc (NASDAQ:) is set to announce that it has started allowing U.S. consumers to use their cryptocurrency holdings to pay at millions of its online merchants globally.

PayPal gained about 1%.

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