bonds could be volatile in the week ahead if yields go higher that could make it difficult for big tech and other growth stocks to gain traction rising bond yields have been challenging growth stocks names like apple tesla and amazon have been lagging as investors move to cyclical groups that do well in an economic recovery even so the sp 500 and the dow both closed at record highs friday while the nasdaq composite was lower the nasdaq home to big tech did gain 3 in the past week but it is down 55 over the last month the bond market in the coming week will likely take its cues from the federal reserve which meets tuesday and wednesday the central bank is expected to give a nod to much better growth bond pros are also watching to see whether fed officials will tweak their interest rate outlook which now does not include any rate hikes through 2023 the markets have way too high expectations around what the fed is going to do or say said gregory peters head of multisector and strategy at pgim fixed income i think the message is going to be consistent he said fed chairman jerome powell is likely to sound dovish and is unlikely to give any time frames on when the central bank will change its bondbuying program or other policy bond yields which move opposite price have been rising on an improving outlook for the economy that trade also showed up in the stock market with the dow up 4 for the week to end friday at a record 32778 consumer discretionary stocks which include retail were among the best performers up 57 boosted by optimism that individuals will spend their 1400 stimulus checks yields were higher friday after president joe biden said all adults would be eligible for a vaccine by may 1 the 10year treasury yield touched a high of 1642 its highest level in more than a year it is the key rate to watch since it affects mortgages and other consumer and business loans the economy is going to be unbelievably strong this year deficit spending reopening vaccines said peters of pgim it looks like for next year all the numbers are being revised higher he said so this thing could have some sustainable growth so i think theres going to be pressure on rates moving higher bond yields rose sharply over the past month the rapid pace of the move has made stocks jittery as investors adjust to higher rates the 10year treasury yield was at 116 on feb 12 over the last month energy stocks have risen nearly 20 financial stocks are up 102 and industrials are up 7 the sp technology sector is down 54 over the last month and communications services which includes internet names was up 08 higher rates are a challenge for tech and other growth stocks because those shares are expensive and have high priceearnings ratios when rates are very low valuations dont matter to people said peter boockvar chief investment officer at bleakley global advisors if rates are low theres no penalty he said if rates start to go up people become much more sensitive to valuations and thats what weve seen here scott redler partner with t3livecom follows shortterm stock market technicals and trades many of the growth stocks lately however hes found himself sitting in many value names and cyclicals the names that im in visa gm ford macys 3m those have been my biggest winners this week he said its been really hard to make money in apple facebook and tesla the nasdaq has been hardest hit by the rise in interest rates apple was down 03 in the past week but down 106 in the past month the sp 500 finished at a record 3943 and was up 26 in the past week but is flattish over the last month up just 02 rate volatility could cause another inflection point in tech redler said last week tech hit its reactionary low and this past week it had an oversold bounce the question is was that it next wednesday powell could be the determining factor he said rates made higher highs and tech is way off last fridays lows so maybe the market is getting more comfortable