Stock futures and government bonds climbed Monday as investors awaited a slate of Federal Reserve speakers and data on the manufacturing sector.
Futures tied to the S&P 500 rose about 1% and contracts for the Nasdaq-100 advanced 1.1% after a bruising week for technology stocks. The broad advance came as the yield on 10-year Treasury notes, the benchmark borrowing cost in global debt markets, slipped to 1.436% from 1.459% Friday. Yields fall when bond prices rise.
Stocks, and particularly shares of tech companies, have been buffeted by volatile moves in government-bond markets in recent trading sessions. A lurch higher in yields last week called into question the prospect of a long period of low interest rates, which had underpinned the past year’s booming rally in stocks.
Monday’s decline in yields helped revive investors’ demand for stocks. But money managers remained wary of further spikes that could spark fresh volatility in share prices. Investors will later parse a speech by Fed governor Lael Brainard for clues about whether the central bank will push back against higher yields.
“This week is key,” said Andrea Carzana, a fund manager for London-based Columbia Threadneedle Investments. If the Fed doesn’t seek to tamp down expectations of higher inflation, yields could continue to rise, rattling the stock market, according to Mr. Carzana.