U.S. stock futures rose sharply in early morning trading on Monday, as Treasury yields continued to retreat from their highs from last week.
Dow futures rose 334 points. S&P 500 futures and Nasdaq 100 futures also both traded in positive territory.
The 10-year Treasury yield dipped to 1.4290%. Prices move inversely to yields.
Boosting sentiment on the vaccine front, the Centers for Disease Control and Prevention advisory panel voted unanimously Sunday to recommend the use of Johnson & Johnson’s one-shot Covid-19 vaccine for people 18 years of age and older. The company expects to ship out 4 millions of doses initially.
Last week, stocks were pressured by rising interest rates. Higher interest rates can threaten the dominance of equities, as bonds are viewed as less risky. The yield on the benchmark 10-year got as high as 1.6% on Thursday but retreated to around 1.41% on Friday.
The Dow Jones Industrial Average and S&P 500 lost and 1.7% and 2.5%, respectively, between Monday and Friday.
The technology-heavy Nasdaq Composite dropped more than 4% for the week, suffering its worst one-day sell-off since October on Thursday. Technology companies rely on being able to borrow money for a low rate in order to invest in future growth.
“Bond market volatility surged to its highest level since April and until some calm and some new peak level of yields is found, this well be the key focus for investors,” Jim Paulsen, The Leuthold Group chief investment strategist, told CNBC.