Commodities hit 8-year high as market divergence continues
Tech stocks suffered some big losses on Monday, as the specter of higher U.S. borrowing costs continued to weigh on their share prices, while bullish vaccine expectations helped make the Dow the only major U.S. index to end in the green.
What happened: The benchmark 10-year Treasury yield rose to 1.37%, a fresh one-year high, showing investors remain bullish on the economy and a recovery in inflation.
• Yields on the 10-year have risen by around 26 basis points since the start of the month and are on track for their largest monthly gain in three years.
• That's good news for the broader economy, as it shows investors foresee higher growth and rising inflation, but bad news for stocks that have flourished in the negative real-rate environment that has been in place since early in 2020.
• That's when the Fed unveiled its QE4ever program and announced it would buy an unlimited supply of U.S. government bonds as well as some corporate bonds — buoying tech stocks, especially, to record high prices and extreme valuations.
The big picture: Along …
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