Shares of industrial and transportation companies ticked down as nervousness about a spike in Treasury yields lingered.
A "raft" of economic data next week could exacerbate the "jolt" higher in Treasury yields amid concerns that massive economic stimulus plans could overheat the economy, according to one strategist. "What the Treasury market is asking is: could 'go big' work in a big way and work quicker than projections from the Federal Reserve?" said Quincy Krosby, chief market strategist at Prudential Financial.
"And that perhaps, the rate schedule put forth by the Fed, perhaps it needs to be revised." The House of Representatives was set to narrowly pass a $1.9 trillion Covid-19 aid bill.
While a gradual increase in yields is to be expected at the end of a recession, the "unruly" move could lead to sudden increases in borrowing costs for consumers and businesses, the strategist said. "Central banks are desperate to tamp down higher yields because obviously higher yields hurt the ability to recover from Covid recessions," said Ms. Krosby.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
02-26-21 1710ET
