© Reuters. FILE PHOTO: A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City
By Shashank Nayar
(Reuters) – Nasdaq 100 futures fell more than 1% on Thursday as bond yields jumped to 14-month highs after the Federal Reserve pledged to look past inflation for a while and keep monetary policy loose through 2023.
Yield-sensitive tech stocks such as Apple Inc (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB), Netflix Inc (NASDAQ:NFLX), Amazon.com Inc (NASDAQ:AMZN) and Microsoft Corp (NASDAQ:MSFT) dropped between 0.8% and 1.7% in premarket trading.
The Dow on Wednesday surpassed 33,000 points for the first time after the Fed projected strongest growth in nearly 40 years as the COVID-19 crisis winds down, and repeated its pledge to keep its target interest rate near zero for years to come.
While inflation is expected to exceed the Fed's 2.0% target to 2.4% this year, Fed Chair Jerome Powell views it as a temporary surge that will not change the central bank's stance.
A $1.9 trillion spending stimulus sparked fears of rising inflation that triggered a jump in longer end Treasuries that led a rotation into value stocks at the cost of high-growth tech stocks.
Big U.S. banks, that are sensitive to economic outlook, including JPMorgan Chase & Co (NYSE:JPM), Bank of America Corp (NYSE:BAC), Citigroup Inc (NYSE:C) and Goldman Sachs (NYSE:GS) were among the top gainers in early premarket trade.Leave a comment