The S&P 500 bounced off 3800 in pre-market trade and is making strides higher on Monday. Bullish pandemic developments and commentary from famous hedge fund investor David Tepper have helped to inject optimism. “Reopening” stocks are outperforming whilst Big Tech and other growth stocks suffer. The S&P 500 has recovered from its pre-open lows seen in the futures markets of just above the 3800 level and currently trades around 0.6% higher on the day. Strength in the index is being driven by gains in “reopening” stocks (i.e. the stocks whose earnings will recover the most as the US economy reopens from Covid-19 restrictions), whilst Big Tech names are suffering; Apple is down 3.2%, Google and Facebook are both over 1.0% lower, Tesla is down more than 3% and the SOXX semiconductor ETF is down about 2.3%. Outperformance in reopening stocks compared to outperformance in tech means the Dow Jones is performing very well, up 1.7%, while the Nasdaq 100 is down roughly 1.0%. Another way to look at the split in equity market performance is to look at how growth stocks (whose value is derived from expectations for future earnings growth) are performing versus value stocks (whose value has more to do with current cash flow); the S&P 500 Value Index is up nearly 2.0% on Monday, whilst the S&P 500 Growth Index is down 0.3%. Driving the day Prior to the market open, higher US bond yields appeared to weigh on equity markets. For reference, the US 10-year yield is up over 5bps on the day to above 1.60%, whilst the 7 and 5-year yields are up more than 6bps each and the 30-year yield up around 3bps to over 2.30%. Whilst higher long-term borrowing rates do appear to still be weighing on Big Tech and growth names (as you would expect given their theoretical greater exposure to rising long-term borrowing costs), a few positive catalysts appear to have triggered a turnaround in sentiment for the rest of the market; Firstly, billionaire hedge fund manager David Tepper, whose comments have frequently moved markets in the past, was very bullish on US equity markets; he said that he went “all in” on stocks on last Friday’s low. Moreover, he said that it’s very difficult to be bearish on stocks right now and that he thinks the sell-off in US government bond markets that has driven yields higher in recent weeks is likely over, given increased buying interest from abroad. He also noted that the recently approved fiscal stimulus package in Congress is another bullish factor. His comments appeared to inject some confidence into the market, pushing the S&P 500 back into the green ahead of the US equity cash open. Elsewhere, pandemic developments in the US have been bullish, a factor likely to be driving much of the rotation from Big Tech and other growth stocks into value and “reopening” stocks that are being seen on Monday. The US Centre for Disease Control announced on Monday that fully vaccinated people will be able to meet indoors without masks, as the risk of Covid-19 transmission is seen as very low – this might not seem like a massive deal, but allowing the vaccinated to meet without restrictions is a big step on the road back to normality, something which markets will likely continue to greet with jubilation going forward. Looking ahead, key events for US equity investors to take note of this week include; Wednesday’s Consumer Price Inflation data release for February and 10-year government bond auction. If the former is stronger than expected and the latter shows poorer than expected demand for US government debt, this would provide fresh impetus to the recent move higher in bond yields, something which could further hurt Big Tech and growth stocks. Meanwhile, US Weekly Jobless Claims on Thursday and Producer Price Inflation and Michigan Consumer Sentiment on Friday will both also be in the spotlight. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next S&P 500 top movers: Airline shares post impressive gains on Monday FX Street 1 year The S&P 500 bounced off 3800 in pre-market trade and is making strides higher on Monday. Bullish pandemic developments and commentary from famous hedge fund investor David Tepper have helped to inject optimism. "Reopening" stocks are outperforming whilst Big Tech and other growth stocks suffer. The S&P 500 has recovered from its pre-open lows seen in the futures markets of just above the 3800 level and currently trades around 0.6% higher on the day. 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