Dow Heads for Record High, Nasdaq Slips with Tech, Beyond Meat Soars—and What Else Is Happening in the Stock Market Today

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Markets will see the latest minutes from the Fed’s monetary policy committee Wednesday.

Karen Bleier/AFP/Getty Images

The stock market was mixed Wednesday, with the Dow headed for a new, all-time high as the Nasdaq was poised to fall amid pressure from higher bond yields.

Futures for the Dow Jones Industrial Average indicated an open less than 30 points or 0.1% higher, after the index rose 214 points to close at a new, all-time high of 36,799 Tuesday. The S&P 500 was on track to start around flat, while futures for the tech-heavy Nasdaq signaled an open 0.3% lower.

Strong economic signals in recent days have supported stocks making up the Dow, while simultaneously helping to lift bond yields. This, in turn, has added weight to many of the technology stocks that make up the Nasdaq—which underperformed the Dow Tuesday by nearly 2 percentage points.

Upbeat industrial data and fewer job openings than expected in November, both revealed Tuesday, add to the narrative of a stronger economy and raise the prospect that the Federal Reserve will be less aggressive in raising interest rates. That is good for economic growth.

Bond yields, which reflect long-term growth expectations, have echoed this sentiment. The yield on the 10-year U.S. Treasury note was down slightly Wednesday, to near 1.64%, after going as high as 1.68% Tuesday. The yield on the benchmark note has soared this week; it was close to 1.5% Monday.

“Seemingly, the sharp rise in U.S. yields this week has sparked a move from growth to value, or as I put it, from the Nasdaq to the Dow Jones,” said Jeffrey Halley, an analyst at broker Oanda. “Whether it lasts is another thing altogether, with such rotations running out of steam over the past 18 months, without really ever gathering momentum.”

Higher bond yields typically discount the present value of future cash, hurting shares in technology companies whose valuations tend to rest on the notion of profits years in the future. That explains much of the underperformance for the Nasdaq.

Meanwhile, investors continue to watch Covid-19 cases closely amid the spread of the more contagious—but apparently more mild—Omicron coronavirus variant, as the U.S. faces a seven-day average of more than 550,000 daily cases.

“You’ve got this real split between the worries around Omicron and the spread of new variants potentially impacting the economy and the fact that rates are going up, inflation is high, and the economy is doing just fine,” added Neil Wilson, an analyst at broker Markets.com.

In the day ahead, investors will pour over the latest meeting minutes from the Federal Open Market Committee (FOMC)—the Fed’s monetary policy committee. The FOMC last met in December.

“Balance sheet policy and the timing of any quantitative tightening will be a major focus in tonight’s minutes, along with any signals for the timing of liftoff and path of subsequent rate hikes,” said Jim Reid, a strategist at Deutsche Bank.

Overseas, London’s FTSE 100 was 0.3% higher and Hong Kong’s Hang Seng Index fell 1.6%.

“China markets are also in retreat on pre-Chinese-New-Year funding fears, China property developers, U.S.-listed technology groups and Huarong with no signs from the People’s Bank of China that it intends to ease the funding crunch as it keeps money tight via the daily repo,” noted Halley.

Shares in Huarong Asset Management—a majority state-owned asset management group—sold off as the company returned to Hong Kong trading following a nine-month suspension over corporate governance issues.

Here are five stocks on the move Wednesday:

Huarong Asset Management (ticker: 2799.H.K.) fell 50% in Hong Kong trading upon the stock’s return to the market.

Beyond Meat (BYND) was up 9% in the U.S. premarket, set to recover after a 5% fall Tuesday. The recent jump came as the company said its plant-based fried chicken product would be available at KFC (YUM) locations in the U.S. next week.

Airbus (AIR.France) fell 0.6% in Paris following a report from Reuters—citing anonymous sources—that carrier Allegiant Air (ALGT) had shunned its traditional supplier, instead ordering 50 737 MAX jets from Boeing (BA) worth some $5 billion. Boeing shares rose 0.5% in the premarket, while Allegiant Air was down 0.7%.

Write to Jack Denton at jack.denton@dowjones.com