U.S. stocks mostly lower as bond yields resume rise

Rising yields were lifting the U.S. dollar and weighing on technology stocks and other growth-oriented shares. Technology and growth stocks are more sensitive to rising bond yields as the net present value of their future earnings growth is reduced more by the higher discount rate implied by rising bond yields.

“The latest moves seem tied to resurgent concerns around inflation. Market-based inflation measures have shot higher as well, perhaps as investors brace for Biden’s multi-trillion infrastructure announcement tomorrow,” said Marios Hadjikyriacos, investment analyst at XM, in a note. President Joe Biden is slated to unveil details of his infrastructure plan in a speech in Pittsburgh on Wednesday.

“Coming on top of the latest avalanche of federal spending, such an enormous investment package could turbocharge economic growth and by extension inflationary pressures,” he said.

Biden’s infrastructure plan, meanwhile, is expected to cost as much as $3 trillion to $4 trillion, offset by tax hikes of up to $3 trillion.

Read: Here’s what tax hikes could mean for the stock market as Biden pushes infrastructure plan

Tech was down 1.3%, leading losses for the S&P 500’s 11 sectors, while financials were up 0.7% and industrials rose 0.3%.

Meanwhile, investors were on the lookout for any further selling of stocks after a large margin call on equity derivatives held by Archegos Capital Management that forced an estimated $30 billion in block sales, triggering plunges in shares of widely held media companies whose stocks were liquidated. Big bank shares were also dented due to worries about their exposure to Archegos.

Read: Here are the complex bets at the heart of ‘unprecedented’ Archegos-linked $30 billion margin call

The Case-Shiller home price index for January showed an 11% year-over-year rise.

The Conference Board’s consumer-confidence index surged in March to a one-year high at 109.7 from a revised 90.4, lifted as more Americans got vaccinated and the government doled out $1,400 stimulus checks in a boost to the economy.

Which companies are in focus?

• Shares of ViacomCBS Inc.
  VIAC,
  +4.87%
  were up more than 5% after falling nearly 7% Monday and suffering steep losses last week in moves tied to the Archegos liquidation.
• Shares of Goldman Sachs Group Inc.
  GS,
  +2.11%
  and Morgan Stanley
  MS,
  +2.49%
  each rose more than 2%. The banks moved large blocks of assets before other large banks that traded with Archegos Capital Management, as the scale of the hedge fund’s losses became apparent, according to The Wall Street Journal, helping to limit their losses amid the stock liquidation.
• PayPal Holdings Inc.
  PYPL,
  +0.36%
  shares were off 0.3% after the payments company said it would start letting U.S. customers purchase items with cryptocurrencies.
• Shares of videogame-retailer GameStop Corp.
  GME,
  +2.89%
  rose 2.7% after it announced the appointment Tuesday of former Amazon executive Elliott Wilke to the role of chief growth officer effective April 5. Wilke has held a range of roles at Amazon in branding, consumer goods and e-commerce, in segments including Amazon Fresh, Prime Pantry and Worldwide Private Brands.

How are other markets trading?

• The ICE U.S. Dollar Index
  DXY,
  +0.32%,
  a measure of the currency against a basket of six major rivals, was up 0.4%.
• Oil futures were under pressure as the Suez Canal reopened to traffic and traders turned their attention to this week’s OPEC+ meeting, with the U.S. benchmark
  CL.1,
  -0.89%
  down 1.2% at $60.81 a barrel.
• Gold futures were under pressure as Treasury yields and the dollar rose, with the June contract
  GCM21,
  -1.70%
  down 1.6% at $1,687.50 an ounce.
• In Europe, the Stoxx 600 index
  SXXP,
  +0.75%
  and London’s FTSE 100
  UKX,
  +0.60%
  each rose 0.6%.
• In Asia, the Shanghai Composite
  SHCOMP,
  +0.62%
  rose 0.6%, while Hong Kong’s Hang Seng Index
  HSI,
  +0.84%
  rose 0.8% and Japan’s Nikkei 225
  NIK,
  +0.16%
  was up 0.2%.