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

[June 17, 2021]  By Shashank Nayar

(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.

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

Shares of tech-heavyweights Amazon.com 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.

(Reporting by Shashank Nayar in Bengaluru; Editing by Sriraj Kalluvila)

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