Exactly one year ago, the 10-year Treasury yield hit a multidecade low that several strategists don’t expect markets will see in the near future. Although the upward climb since then has been bumpy, strategists generally expect yields to move higher given improving global growth, potential government stimulus and tighter monetary policy.
Global sovereign bond yields climbed in the last several weeks after European Central Bank President Mario Draghi said “reflationary forces are at play.” In the U.S., traders expect the Federal Reserve to raise the benchmark interest rate at least one more time this year, and begin reducing balance sheet holdings.
Tech stocks have the greatest weighting in the S&P 500 and can easily direct the overall market performance. The sector has surged more than 18 percent this year as the best S&P 500 performer, but struggled in the last several weeks as traders worried big tech names may be getting too expensive.
Over the last 30 trading days, technology is only the fourth-best performer in the S&P 500. The benchmark index last hit a record nearly a month ago on June 19.
Tech traded slightly higher Tuesday, on pace for weekly gains of more than 1 percent.
However, the “tech bounce [is] likely short lived,” Fundstrat Technical Strategist Robert Sluymer said in a Tuesday note. “Our longer-term cycle indicators continue to suggest downside risk heading into August and the Fall.”
Some of those indicators, Sluymer said, include the economic surprise index for G-10 economies that is “collapsing from peak levels” and a falling percentage of stocks with positive momentum.
— CNBC’s Jeff Cox contributed to this report.
