Tech stocks to drag Wall St lower after Fed's taper talk

FILE PHOTO: The New York Stock Exchange is pictured in the Manhattan borough of New York City, New York, U.S., April 16, 2021. REUTERS/Carlo Allegri/File Photo

(Reuters) – Technology stocks were set to lead Wall Street lower on Thursday after the Federal Reserve signaled it could start tapering its massive stimulus earlier than expected, piling pressure on a sector that is seen as vulnerable to higher interest rates.

Shares of tech-heavyweights Inc, Apple, Microsoft Corp, Facebook Inc and Google-parent Alphabet Inc, which soared last year on the back of an ultra-loose policy by the Fed, fell between 0.4% and 0.6% in early deals.

Investors are now razor focused on weekly jobless claims data that is due at 8:30 a.m. ET and is expected to lend credence to the central bank’s projections of a speedy economic recovery.

In a hawkish surprise on Wednesday, the Fed hinted at two rate hikes in 2023, a year earlier than expected and also said it sees inflation hitting 3.4% this year, well above its initial 2% goal.

Dow futures dropped to a near one-month low, with Cisco and Intel Corp among the top losers in early trade.

Rate-sensitive lenders including Citigroup, JPMorgan Chase, Bank of America and Wells Fargo, on the other hand, rose between 0.4% and 0.7%.

At 6:54 a.m. ET, Nasdaq 100 e-minis were down 76.5 points, or 0.55%, Dow e-minis were down 116 points, or 0.34%, S&P 500 e-minis were down 15.25 points, or 0.36%.

In corporate news, U.S.-listed shares of CureVac NV tumbled 45% after the German biotech said on Wednesday its COVID-19 vaccine was 47% effective in a late-stage trial, missing study’s main goal.

Investors are also waiting for quarterly earnings reports from Kroger and Adobe later in the day.

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