Stocks Pull Back After Yesterdays Rally

Stocks Take A Pause After Yesterdays Upside Move

S&P 500 futures are losing some ground in premarket trading as traders wait for additional catalysts after yesterdays strong session.

The market remains optimistic about the next round of stimulus as Democrats are ready to abandon their plans on minimum wage in order to ensure that the stimulus package is passed in the upcoming days.

The recent increase in U.S. Treasury yields put some pressure on stocks, especially in the tech space. However, Big Tech stocks like Microsoft or Apple have managed to quickly recover from sell-off and gained strong momentum on Monday.

Interestingly, Treasury yields continue to move higher but traders look ready to ignore the risk of higher inflation as they stay focused on dovish Fed and the upcoming stimulus package.

Oil Gains Ground As Traders Prepare For OPEC+ Meeting

OPEC+ will meet on March 4 to discuss the current situation in the oil market. Oil got significant support from Saudi Arabias decision to cut production by 1 million barrels per day (bpd) in February and March, but now OPEC+ will have to find a way to get to higher production levels.

OPEC+ members will likely try to increase their output in April as they want to profit from the recent upside move in the oil market. At the same time, it remains to be seen whether the market is strong enough to deal with 1 million bpd of returning supply from Saudi Arabia and additional supply from other OPEC+ members.

At this point, traders remain optimistic, and WTI oil gets significant support near the psychologically important $60 level which is bullish for oil-related equities.

U.S. Dollar Continues To Move Higher

Rising yields provided material suport to the American currency, and the U.S. dollar is moving higher for the fourth trading session in a row. The markets mood was bearish at the beginning of this year, but the U.S. dollar managed to gain ground in the first two months of 2021.

Stronger dollar and higher yields continue to put pressure on gold and silver. Gold has recently managed to settle below $1750 and made an attempt to get to the test of the $1700 level, so shares of gold miners may face additional pressure at the start of todays trading session.