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Futures off Dow 0.3, SP 0.3, Nasdaq 0.5 Adds comment, updates prices
June 17 Reuters Weakness in tech shares was set to pull Wall Street lower on Thursday after the Federal Reserve signaled it could start tapering its stimulus earlier than expected, piling pressure on a sector that is seen as vulnerable to higher interest rates.
Shares of techheavyweights Amazon.com Inc, Apple , Microsoft Corp, Facebook Inc and Googleparent Alphabet Inc, which soared last year on the back of an ultraloose policy by the Fed, fell between 0.4 and 0.8 in early deals.
In the short run, tech will have a harder time outperforming the cyclicals only because the Fed is hinting at raising interest rates, said Tom Mantione, managing director, UBS Private Wealth Management, based in Stamford, Connecticut.
In a hawkish surprise on Wednesday, the Fed hinted at two rate hikes in 2023, a year earlier than expected, and also said it was expecting inflation to hit 3.4 this year, well above its initial 2 goal.
Dow futures dropped to a near onemonth low, with Cisco and Intel Corp among the top losers in early trade.
Ratesensitive lenders including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo, on the other hand, rose between 0.4 and 0.7.
The pace of economic growth and reopening optimism has driven the SP 500 and Nasdaq indexes to record highs.