S&P 500 futures drop even as Yellen makes a case for more stimulus

• The S&P 500 futures drop, pushing the dollar higher.
• Yellen says $1.9 trillion stimulus would help the economy reach full employment.

The US stock futures are failing to cheer the US Treasury Secretary Janet Yellen's calls for sizeable coronavirus stimulus. 

The futures tied to the S&P 500 are trading near 31,340 at press time, representing a 0.28% drop on the day. The dollar index, which tracks the greenback's value against majors, has recovered from session lows to 90.65.

While the US economy is showing signs of life, more stimulus is needed to force a full recovery, Yellen told CNBC after Thursday's after market hours.

"We think it's very important to have a big package [that] addresses the pain this has caused – 15 million Americans behind on their rent, 24 million adults and 12 million children who don't have enough to eat, small businesses failing," Yellen told CNBC, adding that a $1.9 trillion stimulus would get the US economy back to full employment in a year. 

Markets have been pricing bigger spending under Joe Biden's presidency for some time. That's evident from the record rally in stocks, a recent surge in bond yields, and an uptick in inflation expectations. 

However, the stock market rally is now showing signs of exhaustion. The S&P 500 fell for a third straight day on Thursday on dismal jobless claims data and weak guidance from Walmart.

A continued rise in bond yields could trigger a rotation of money out of stocks and into bonds.