US Close: Stocks rotate out of Nasdaq into Dow and Russell, Dollar down

The higher Treasury yields move up, the quicker investors are rotating out of high-flying tech stocks and into stocks in the Russell 2000 Index and Dow Jones Industrial Average.  The move up in rates will not yet test the Fed’s patience and that should allow for Fed Chair Powell to maintain his dovish stance over his last couple of appearances.

Powell will likely reiterate they are nowhere near their employment and inflation targets.  The path of rates won’t change this year, with the earliest that some economists see a potential move up in rates being next January.  Since financial conditions are tightening and with wage pressures remaining nonexistent, that should keep inflation fears from getting out of control.   The economic data has been improving but remains inconsistent and that is all Powell needs to keep his ultra-accommodative stance.

Investors remain committed to US stocks due to the faster pace of vaccinations, which will support a quicker reopening and outperformance over in Europe.  European indexes pared losses after ECB President Lagarde noted the ECB is closely monitoring long-term nominal bond yields.  Europe’s delay of a few months over vaccinations suggest the recovery can’t handle a surge in yields just yet.


The dollar declined across the board as Democrats moved closer to delivering on President Biden’s $1.9 trillion COVID relief bill.  The dollar initially was strong in Europe but has since declined dramatically ahead of Tuesday’s testimony from Fed Chair Powell which should be a dovish confirmation that their current policy is widely appropriate.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.