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S&P 500 reaches record high as technology stocks jump, Treasury yields steady

S&P 500 reaches record high as technology stocks jump, Treasury yields steady

Stocks traded mostly higher Thursday, with investors awaiting the start of first-quarter earnings season to confirm the boost to corporate profits expected against an improving economic backdrop. 

Technology stocks outperformed, leading the Nasdaq and S&P 500 higher, and the latter to a record intraday level. Shares of Alphabet (GOOGL), Microsoft (MSFT) and Facebook (FB) each also hit all-time highs. The Dow traded slightly lower. 

Stocks have been trading in a holding pattern this week after reaching record highs. Risk assets got a small boost after the Federal Reserve signaled in its March meeting minutes that most monetary policymakers favored keeping monetary policy highly accommodative as the economic recovery continues, signaling that they will hold off on tightening at the first signs of inflation during the rebound. 

“A big part of this is making sure the vaccine-led recovery is firmly rooted, and that won’t be clear until somewhere in the second half of this year. So it’s possible that as we look out to the late summer timeframe or early fall that that’s something that we could consider at that point,” Jeffrey Kleintop, Charles Schwab chief global investment strategist, told Yahoo Finance. “But until then, there’s still a lot of risks. and just to backtrack it, we know that monetary policy works with a lag, and so it makes more sense to ensure that we’re on solid footing before you begin to take your foot off the pedal.” 

In absence of many notable economic data reports or earnings releases this week, investors have fixed their focus to next week, when corporate results for the first three months of 2021 will begin to trickle in. Earnings estimates have been revised up by a record margin over the past several weeks as analysts took into account the expected earnings growth coming alongside increasing economic growth. Cyclical stocks like financials and energy names, which have profits closely linked to the pace of the economic recovery, have been among the biggest recent beneficiaries. 

“We’re still in probably the early parts of the expansionary cyclical after recovering from that recession,” Omar Aguilar, Charles Schwab chief investment officer of passive equities and multi-asset strategies, told Yahoo Finance. “We’ve started to see cyclical trades playing a big role in the early part of the cycle. Normally what happens at this stage is you continue to see … the cyclical component will continue to drive leadership into the second part of this year into next year.”

At the same time, however, other strategists warned that much of the recovery may already be priced into U.S. equities. And as expectations rise, earnings will need to clear an even greater hurdle in order to impress Wall Street and push stock prices up further. 

“As bottom-up S&P 500 Q1 and 2021 EPS estimates saw some of the biggest increases on record during the first three months of the year. The price strength exhibited in U.S. equities left the S&P 500 just 3.1% off our 2021 year-end price target with risk to our target now slanted to the upside,” Brian Belski, BMO Capital Markets chief investment strategist, wrote in a note. The firm maintained its 2021 price target of 4,200 on the S&P 500. 

“We believe investors should be prepared for a second half of the year that will likely be weaker in terms of price gains compared to 1H as the reopening and cyclicals trade matures and investors start to digest the implications of an EPS-driven environment,” Belski added. 

9:30 a.m. ET: Stocks open mixed, S&P 500 hits record high

Here’s where markets were trading shortly after the opening bell Thursday morning: 

  • S&P 500 (^GSPC): +10.88 points (+0.27%) to 4,090.83

  • Dow (^DJI): -16.25 points (-0.05%) to 33,430.01

  • Nasdaq (^IXIC): +111.45 points (+0.83%) to 13,804.3

  • Crude (CL=F): -$0.45 (-0.75%) to $59.32 a barrel

  • Gold (GC=F): +$10.30 (+0.59%) to $1,751.90 per ounce

  • 10-year Treasury (^TNX): -0.1 bps to yield 1.644%

8:30 a.m. ET: Jobless claims unexpectedly rose to a three-week high last week

New weekly jobless claims unexpectedly jumped last week to reach the highest level in three weeks, despite other signs of strengthening labor market trends across the recovering economy. 

New jobless claims totaled 744,000 for the week ended April 3, the Labor Department said. Consensus economists were looking for claims to fall to 680,000, from the upwardly revised 728,000 from the prior week. Continuing jobless claims were also higher than expected at 3.734 million versus the 3.638 million expected, though last week’s continuing claims were downwardly revised to 3.75 million. 

7:06 a.m. ET Thursday: Stock futures trade mixed, Nasdaq futures gain 0.9%

Here’s where markets were moving as of 7:06 a.m. ET Thursday morning;

  • S&P 500 futures (ES=F): 4,082.75, up 12.75 points or 0.31%

  • Dow futures (YM=F): 33,311.00, down 17 points or 0.05%

  • Nasdaq futures (NQ=F): 13,729.5, up 124.75 points or 0.92%

  • Crude (CL=F): -$0.41 (-0.69%) to $59.36 a barrel

  • Gold (GC=F): +$5.00 (+0.29%) to $1,746.60 per ounce

  • 10-year Treasury (^TNX): -0.7 bps to yield 1.647%

6:00 p.m. ET Wednesday: Stock futures edge up 

Here’s where markets were trading Wednesday evening:

  • S&P 500 futures (ES=F): 4,074.75, up 4.75 points or 0.12%

  • Dow futures (YM=F): 33,344.00, up 16 points or 0.05%

  • Nasdaq futures (NQ=F): 13,627.00, up 22.25 points or 0.16%

People walk past the New York Stock Exchange (NYSE) at Wall Street and the ‘Fearless Girl’ statue on March 23, 2021 in New York City. – Wall Street stocks were under pressure early ahead of congressional testimony from Federal Reserve Chief Jerome Powell as US Treasury bond yields continued to retreat. (Photo by Angela Weiss / AFP) (Photo by ANGELA WEISS/AFP via Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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Christine Watkins

Christine founded Sports Grind Entertainment with an aim to bring relevant and unaltered Sports news to the general public with a specific view point for each story catered by the team. She is a proficient journalist who holds a reputable portfolio with proficiency in content analysis and research.

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