Stock market news live updates: Stock futures edge higher after tech-led rally - Yahoo Finance

Stock futures opened slightly higher on Tuesday, drifting after a rally led by technology stocks recovering some of their recent declines.

Contracts on the Nasdaq kicked off the overnight session a tick above the flat line after the index closed the regular higher by 3.7% to post its best day since November. The jump came only a day after the index slid into a correction, closing more than 10% below its February record closing high. The S&P 500 also rallied more than 1% on Tuesday, led by the consumer discretionary sector as Tesla's stock surged 20% for its first rise in six sessions and its biggest single-session gain in over one year.

While the Dow ended only a tick above the flat line on Tuesday, its modest move higher belied weeks of outperformance against the other two major indexes amid a broad-based rotation into cyclical and value stocks and away from growth and technology names.

The factors setting off the rotation – namely, the quick ramp higher in Treasury yields and concerns of inflation and higher rates weighing on growth stocks especially – remain a focal point for investors. Though the benchmark 10-year Treasury yield pulled back on Tuesday, it still is nearly 50 basis points above levels from last month after a brisk march higher. Frances Newton Stacy, director of strategy at Optimal Capital, told Yahoo Finance that Tuesday's tech-led rally may have been only a "dead cat bounce" for the Nasdaq.

Other strategists agreed that jitters over inflation and rising rates would likely remain a central theme for investors this year.

"There’s the irony that in year one of a market recovery everybody doubts it and says how can this be happening if the economy isn’t good, and then in year two everybody struggles to assess whether [the economy has] just gotten too good too fast and it’s too hot,” Brian Levitt, global market strategist at Invesco, told Yahoo Finance on Tuesday. “And so the last few days have been the latter story: Markets being disrupted by concerns of inflation and higher rates and premature Fed tightening. And today’s a little bit of a reprieve on that story as rates come down a bit and investors can start thinking about longer-duration assets again.”

"It’s going to be a debate all year, this idea of inflation and higher rates and Fed tightening," he added. "And that could put some challenges into the market, particularly longer-duration assets. But ultimately I wouldn’t sleep on growth stocks and I expect the structural growth companies to continue to be the long-term winners here."

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