US stock futures rise as bond yields fall after tech rout, but sell-off spreads to Asia

• US futures edged higher on Friday after a sharp sell-off in tech stocks the day before.
• Rising bond yields, which have unnerved investors, cooled on Friday.
• The stock-market sell-off spread to Asia, however, with China's CSI 300 down 2.6%.

US stock futures rose on Friday after a spike in bond yields triggered a sharp-sell off in technology stocks on Thursday, with markets set for a quieter end to a volatile week.

Bond yields cooled on Friday morning, with the key 10-year Treasury note yield dropping back below a 14-month high of above 1.7% to 1.687%. Yields move inversely to prices.

Futures for the tech-heavy Nasdaq 100 climbed 0.81% after the index tumbled 3.13% on Thursday. S&P 500 futures were up 0.39% after the gauge fell 1.48% the previous day, while Dow Jones futures were 0.22% higher after a 0.46% fall.

Yet the selling in US markets spread to Asia, with China's CSI 300 dropping 2.62% and Japan's Nikkei 225 falling 1.41%.

In Europe, the Stoxx 600 slipped 0.34% in early trading while the UK's FTSE 100 fell 0.60%.

It has been a rocky few weeks for stock markets around the world. Bond yields have risen sharply thanks to stronger growth and inflation expectations making investors demand higher returns.

As low yields were a key driver of the rally in stocks - particularly tech firms - the increase has worried many investors.

The market looked to the Federal Reserve on Wednesday to signal it was not planning to raise interest rates sooner than expected, as growth picks up.

Fed Chairman Jerome Powell initially pleased the market by saying policy would remain loose. But the central bank raised its growth and inflation forecasts, which helped push bond yields to a 14-month high intraday high of 1.75% on Thursday as prices fell.

Chris Scicluna of Daiwa Capital Markets said: "Yesterday investors seemingly concluded that the substantial upward revision to the Fed's growth outlook and chair Powell's obvious lack of discomfort with higher bond yields warranted a further sell-off in the Treasury market.

"Against that background, it was always going to be a difficult day for most Asian investors," he added. "The first of a series of much-awaited meetings between US and Chinese officials generated a number of headlines at the outset that probably didn't help market sentiment."

Bond yields slipped back in European trading on Friday, giving investors the confidence to snap up US tech stock futures again after Thursday's drop.

Many investors are still highly optimistic about equities, given the rise in growth expectations. Bank of America analysts said in a note: "Buy cyclicals, value, and start taking a fresh look at tech, already bruised by rising bond-yield concerns."

In the oil markets, prices recovered somewhat after tumbling 7% on Thursday as investors second-guessed the recent rally and reacted to the slow rollout of coronavirus vaccines in Europe that could dent demand growth.

The global benchmark Brent crude price was 1.37% higher to $64.13 a barrel, while WTI crude was up 1.45% to $60.89 a barrel.

Ths dollar index slipped 0.1% to 91.78. Bitcoin was up around 1% to $58,510.