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The
Dow notched five consecutive record highs last week as approval
of one of the largest fiscal stimulus in U.S. history and
vaccine rollouts fueled demand for economy-linked stocks such as
banks, energy, materials at the cost of tech names with lofty
valuations.
The reopening optimism has also raised bets on a rise in
inflation and, in response, a tapering of the Fed's easy
monetary policy that triggered a spike in U.S. bond yields in
recent weeks and roiled equities.
At the end of Fed's two-day meeting on Wednesday, policymakers
are expected to forecast that the U.S. economy will grow in 2021
at the fastest rate in decades while reiterating their dovish
stance for the foreseeable future.
The yields on benchmark 10-year Treasuries hovered near their
13-month high at 1.61%, slightly lower than its peak of 1.64%
hit on Friday. Investors suspect a $1.9 trillion relief package,
which amounts to more than 8% of the country's GDP, could stoke
inflation.
At 6:36 a.m. ET, Dow E-minis were up 118 points, or 0.36%, S&P
500 E-minis were up 7.5 points, or 0.2%, and Nasdaq 100 E-minis
were up 24.75 points, or 0.19%.
Facebook Inc, Apple Inc, Amazon.com Inc, Netflix Inc, Alphabet
Inc and Microsoft rose between 0.1% and 0.6% in early trade.
Microsoft stands to receive nearly a quarter of COVID relief
funds destined for U.S. cybersecurity defenders, sources told
Reuters, angering some lawmakers who don't want to increase
funding for a company whose software was recently at the heart
of two big hacks.
Eli Lilly and Co dropped about 5% premarket as analysts said the
company's mid-stage trial data for its experimental drug to
treat Alzheimer's cast a doubt on the approval timeline.
(Reporting by Shashank Nayar and Medha Singh in Bengaluru;
Editing by Maju Samuel)
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