Five market trends investors are focused on for the second quarter

NEW YORK (Apr 1) - The first quarter of 2021 kept investors on their toes as it served up surging yields, an accelerated rotation into cyclical stocks and wild rides in the shares of GameStop that brought the retail investors of WallStreetBets into the public eye.

Here are some trends investors are positioning for in the second quarter, and how they could impact broader markets.

The yield on the benchmark 10-year U.S. Treasury rose by about 80 basis points in the second quarter - its third-largest quarterly increase over the past decade - as investors sold bonds in anticipation of a U.S. economic recovery and higher inflation.

Many investors believe the move will continue - Goldman Sachs sees the yield at 1.9% by the end of 2021, while TD Securities expects yields to rise to 2%.

The move "is happening, we believe, for the right reasons," said Gargi Pal Chaudhuri, head of iShares investment strategy, Americas at BlackRock.

Chaudhuri believes further upside in yields is unlikely to derail a rally that took the S&P 500 to a fresh record on Wednesday, as yields are rising from "very, very low levels."

Others are less certain. Forty-three percent of investors in the most recent BofA Global Research fund manager survey said 2% on the 10-year could trigger a selloff in stocks.

Reuters