Nasdaq futures scale new peak, all eyes on Fed minutes

[July 07, 2021]  By Devik Jain and Shreyashi Sanyal

(Reuters) - The Nasdaq futures hit a record high on Wednesday as a fall in Treasury yields supported tech-heavy growth stocks, while investors focused on the Federal Reserve's minutes from the June meeting to gauge the trajectory of policy support going forward.

Yield on the U.S. 10-year notes slipped for the seventh straight session, while mega-cap technology names Facebook Inc Apple Inc, Alphabet Inc and Amazon.com Inc gained between 0.6% and 0.7% in premarket trading.

Fast-growing technology stocks are sensitive to yields as their value rests heavily on future earnings, which are discounted more deeply when bond returns go up.

On the other hand, rate-sensitive banking stocks like Bank of America, Goldman Sachs and JP Morgan Chase & Co edged lower, adding to sharp losses in the previous session.
 

The Fed minutes, due at 2 p.m. ET, is expected to offer clues on how the U.S. central bank may begin to pare its large bond-buying program amid signs of quickening economic recovery.

Wall Street has been concerned over runaway inflation, with investors moving between economy-linked value stocks and growth names in the past few sessions.

The New York Stock Exchange is pictured in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri

The Dow and S&P 500 fell on Tuesday, with financials and other groups closely tied to economic growth leading declines, while the Nasdaq notched a second-straight closing record.

At 6:47 a.m. ET, Dow e-minis were up 31 points, or 0.09%, S&P 500 e-minis were up 7.75 points, or 0.18%, and Nasdaq 100 e-minis were up 70.5 points, or 0.48%.

Oil stocks Exxon Mobil, Schlumberger NV, ConocoPhillips, Marathon Oil Corp, Occidental Petroleum Corp and Halliburton Co rose between 0.7% and 3.4%, tracking crude prices.

China's market regulator said it has fined a number of internet companies including Didi Global, Tencent and Alibaba for failing to report earlier merger and acquisition deals for approval.

U.S.-listed shares of Didi fell 4.3%, while Alibaba edged 0.4% higher.

(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur)

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