Wall St Week Ahead Tech retakes market lead as investors eye yields, earnings

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U.S. technology and growth stocks have taken the market's reins in recent weeks, pausing a rotation into value shares as investors assess the trajectory of bond yields and upcoming earnings reports.

The gains have followed a months-long rotation in which tech stocks were outpaced by shares of banks, energy companies and other economically-sensitive names that have surged since breakthroughs in COVID-19 vaccines late last year.

"Tech and growth has started to pick up a little bit because people are getting a little more cautious," said Lindsey Bell, chief investment strategist at Ally Invest. "Investors are in this wait-and-see mode ... at least until earnings get underway." Higher bond yields are particularly challenging for the performance of tech and other shares with high valuations and high expected future profits, as rising yields reduce the stocks' values in many standard models. The 10-year yield rose about 83 basis points in the first quarter.

 

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