Retreating bond yields push up tech stocks, Nasdaq

A retreat from recent peaks in bond yields pushed the tech-driven Nasdaq index up Monday morning, while other indexes saw mixed results.

The Nasdaq composite opened up nearly 100 points, or 0.8 percent, while the S&P 500 was flat with a 3-point increase, or 0.1 percent, and the Dow Jones Industrial Average slumped 106 points, or 0.3 percent.

Yields on 10-year Treasury bonds, which rose to a 14-month high last week amid concerns of inflation and the possibility of an overheating economy, retreated to 1.68 percent, a drop of 0.04 percentage points.

Markets have been tentative in embracing new highs, as the economy appears set for a major rebound due to increasing vaccination rates and foreseeable end to the COVID-19 pandemic that ravaged the economy for over a year.

Critics of President Biden’s $1.9 trillion relief plan worry that its sheer magnitude will push demand up before supply can follow, leading to price increases.

Federal Reserve Chairman Jerome Powell has signaled that a brief jump in prices will not spur higher interest rates and that any spike in inflation is likely to be temporary.