Wall Street Faces Pressure as Tech Stocks Struggle and Bond Yields Surge

U.S. stock futures took a hit on Monday, weighed down by soaring bond yields and continued weakness in the tech sector. S&P 500 futures fell 0.58%, Nasdaq 100 futures dropped 0.94%, and Dow Jones Industrial Average futures shed 50 points, or 0.1%. These declines follow two consecutive weeks of losses for all three major indexes, driven largely by a sell-off in high-growth technology stocks.
Tech Giants Continue to Struggle
The tech sector, once a market leader, extended its slide, with stocks like Nvidia and Palantir shedding around 3% each in premarket trading. This follows significant declines of 6% and 11% last week, respectively. Other major tech names, including Tesla, Broadcom, and Micron, also faced selling pressure.
Rising bond yields have been a key factor in this downturn, as the 10-year Treasury yield surged to 4.77%, its highest point in over a year. These higher yields have made growth stocks less appealing, particularly with inflation concerns mounting. This week’s Producer Price Index (PPI) report on Tuesday and the Consumer Price Index (CPI) report on Wednesday will be closely watched by investors, as they will provide insight into the Federal Reserve’s next move.
Can Earnings Season Provide a Boost?
As market volatility persists, investor attention is turning to the start of the fourth-quarter earnings season. Major banks, including JPMorgan Chase, Goldman Sachs, and Citigroup, are set to report earnings on Wednesday, with Morgan Stanley and Bank of America following on Thursday. Strong results from these financial giants could offer a much-needed boost to market sentiment.
Meanwhile, managed care stocks showed resilience, outperforming broader market trends. The U.S. government proposed a 4.3% increase in Medicare Advantage reimbursement rates for 2026, leading Humana to jump nearly 6%. UnitedHealth and CVS Health also saw gains of 3%, signaling strength in sectors outside of tech.
Stocks Making Headlines
A number of high-profile stocks moved sharply on Monday. Quantum stocks suffered significant losses after Mark Zuckerberg downplayed the near-term potential of quantum technology. Rigetti Computing plummeted 25%, and D-Wave Quantum fell 16%.
In contrast, Intra-Cellular Therapies soared 34% after Johnson & Johnson announced a $14.6 billion acquisition deal.
Retail stocks presented mixed results: Lululemon gained over 3% after increasing its holiday sales forecast, while Macy’s dropped 2% on a weaker-than-expected fourth-quarter revenue outlook. Moderna saw its shares plummet 20% after lowering its 2025 revenue guidance by $1 billion.
Bearish Outlook Amid Rising Risks
With bond yields climbing and inflation data looming, the short-term outlook for equities remains cautious. Rising interest rates are likely to continue pressuring growth stocks, especially in the tech sector. Investors should also prepare for earnings volatility, as signs of weak consumer trends have already emerged, particularly in the guidance from retailers like Macy’s and Abercrombie & Fitch.
As inflation reports and Federal Reserve commentary take center stage this week, traders should stay vigilant. These will be crucial in shaping future rate expectations and overall market sentiment. For now, caution is advised, as further downside risks appear on the horizon in the coming weeks.