By Shashank Nayar
(Reuters) – 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:), Facebook Inc (NASDAQ:), Netflix Inc (NASDAQ:), Amazon.com Inc (NASDAQ:) and Microsoft Corp (NASDAQ:) 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:), Bank of America Corp (NYSE:), Citigroup Inc (NYSE:) and Goldman Sachs (NYSE:) were among the top gainers in early premarket trade.
At 06:26 a.m. ET, Dow E-minis were up 46 points, or 0.14%, E-minis were down 15.75 points, or 0.4%, and E-minis were down 142.75 points, or 1.08%.
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