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U.S. stock futures dropped Tuesday as the 10-year Treasury yield hit a 14-month high in early trading. On Monday, the Nasdaq dropped and the S&P 500 fell from the previous session's record close. The Dow Jones Industrial Average bucked Monday's downdraft, closing at another record despite weakness in bank stocks caught in the fallout of the Archegos Capital Management margin call chaos. With two days left in March, the Dow and S&P 500 were sitting on solid gains for the month. The Nasdaq was tracking for a monthly loss.
The 10-year Treasury yield topped 1.77% early Tuesday, taking out another January 2020 high, as Covid vaccine rollouts and planned infrastructure spending boosted hopes of a broad U.S. economic recovery. However, the move also stoked inflation fears and put growth stocks, many of them tech names, under pressure because higher interest rates erode the value of future profits and squeeze market valuations.
In the Archegos meltdown, triggered by last week's slide in shares of ViacomCBS and other stocks, Goldman Sachs avoided losses in the episode, CNBC's Hugh Son reported. By the time Switzerland's Credit Suisse and Japan's Nomura said early Monday they unloaded positions on behalf of Archegos, Goldman and its Wall Street rival Morgan Stanley had already finished unloading their positions, according to people with knowledge of the matter. Archegos is a family office founded and by Bill Hwang, a former equity analyst at Julian Robertson's Tiger Management.
The U.S. is facing "impending doom" as daily Covid cases begin to rebound once again, warned CDC Director Dr. Rochelle Walensky. "We have so much to look forward to, so much promise and potential of where we are and so much reason for hope, but right now I'm scared," she said in an emotional, candid moment during Monday morning's press briefing. Even as vaccinations accelerate nationwide, coronavirus hospitalizations are also climbing and falling fatalities are starting to plateau. Walensky urged Americans to "just hold on a little longer."
President Joe Biden followed his CDC director's comments by urging governors and local leaders who dropped sweeping mask mandates to reinstate the orders. While indicating that some states should wait to reopen their economies, he also condemned "reckless behavior" likely to spur more infections.
"We're giving up hard-fought, hard-won gains," Biden said in Monday afternoon's press briefing. "As much as we're doing America, it's time to do even more." He said a failure to take the virus seriously "is precisely what got us in this mess in the first place" and could lead to more infections and deaths.
— Get the latest on the pandemic with CNBC's coronavirus blog.