By Yasin Ebrahim
Investing.com – The S&P 500 slipped Thursday, as a rout in big tech more than offset a rise in cyclicals a day after the Federal Reserve laid out a plan to speed up bond purchase tapering and begin hiking rates next year.
Adobe Systems (NASDAQ:ADBE) was also a big loser on the day, shedding more than 10% after software maker’s fiscal 2022 fell short of Wall Street estimates.
The selloff in growth sectors like tech come a day after the Federal Reserve said it would double the pace of its monthly bond tapering to $30 billion per month, and forecast up to three hikes for next year and 2023.
“That decision [of when to hike rates] will be taken ‘in coming meetings’, which puts June in play, one quarter earlier than our call for 3Q22 liftoff,” Morgan Stanley said in a note.
Financials, meanwhile, racked up gains as investors bet that the U.S. Treasury yields are set for a boost following the slightly more hawkish than expected path of rate hikes laid out by the U.S. central bank on Wednesday.
Other value sectors of the market, which tend to move tandem with economy, like materials and energy also advanced.
Energy was up nearly 1%, riding the climb higher in the oil prices as investors continued to assess the demand the outlook for energy following a bullish update from the Energy Information Agency.
“[The] US Department of Energy reported a considerable decline in crude oil and oil product stocks, with crude oil seeing its most pronounced inventory reduction since September,” Commerzbank said.
In health care, Johnson & Johnson (NYSE:JNJ) ended the day more than 1% higher despite an advisory panel for the Centers for Disease Control and Prevention voted unanimously to recommend vaccines from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) over the Johnson & Johnson vaccine.
In other news, Delta Air Lines (NYSE:DAL) forecast fourth quarter profit of $200 million underpinned by strong holiday demand and rising fares in the fourth quarter.
S&P 500 Wobbles as Big Tech Wreckage Offset Shine in Cyclicals
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