NEW YORK: The Nasdaq fell on Wednesday led by a slide in big technology firms as investors rotated out of growth stocks, while awaiting the release of minutes from the U.S Federal Reserve’s January meeting later in the day.
Shares in Apple Inc, Tesla Inc and Microsoft Corp fell between 1.0% and 2.5%, weighing the most on the tech-heavy index. The S&P 500 technology sector fell 0.9%, while the communication services sector dropped 0.1%.
Both the S&P sectors house many stocks with high earnings multiples, which many analysts say may come under pressure with rising yields.
Rising inflation expectations pushed benchmark 10-year US Treasury yields to their highest in a year on Wednesday.
“The reflation trade has been good for stock markets as it’s driven by optimism around the recovery, but that will only continue to a point ... if yields start rising at a rate considered too fast, sentiment will quickly change in stock markets,” said Craig Erlam, senior market analyst at OANDA.
At 9:56 a.m. ET the Dow Jones Industrial Average was down 17.73 points, or 0.06%, at 31,505.02, the S&P 500 was down 11.15 points, or 0.28%, at 3,921.44, and the Nasdaq Composite was down 84.07 points, or 0.60%, at 13,963.43.—Reuters
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