The Standard & Poor’s 500 and the Nasdaq fell as technology stocks gave up gains

(Reuters) – The Standard & Poor’s 500 and the Nasdaq gave up early gains to fall on Wednesday as technology stocks reversed course, while investors awaited inflation data and the Federal Reserve’s monetary policy meeting next week.

Major technology and growth stocks slipped between 0.1% and 3.1%, with the exception of Netlfix (NFLX.O) and Tesla (TSLA.O), which rose 1.1% and 1.8%, respectively.

More than half of S&P’s sub-sectors declined, led by Telecom Services (.SPLRCL) which lost 1.4%.

US inflation data is expected to show a slight decline in consumer prices on a monthly basis in May, but core prices are likely to remain elevated.

Putting pressure on stocks, the two-year US Treasury yield and the benchmark 10-year yield rose after the Bank of Canada raised interest rates, adding to market concerns about the Fed’s interest rate decision.

Money market participants now see a 69% chance that the US central bank will skip a rate hike at its June meeting but will raise in July, down from roughly 77%, according to CME’s Fedwatch tool.

US stocks have been boosted recently by a rally in blue chips and a stronger-than-expected earnings season, with the S&P 500 (.SPX) up nearly 20% from its October 2022 lows.

And Peter Andersen, founder of Andersen Capital Management, said Wednesday’s decline reflects investors’ lack of confidence about the sustainability of the rally, as it relies on a small concentration of major names.

Some analysts say big tech companies and other major growth stocks could soon see some profit-taking.

Meanwhile, the CBOE Volatility Index (.VIX) hit its lowest level since February 14, 2020.

Wells Fargo raised its price target for Netflix shares to $500 from $400 a share, the highest on Wall Street, according to Refinitiv.

The Energy Index (.SPNY) rose 2.5% after oil prices rose, while the KBW Regional Banking Index (.KRX) hit a two-month high.

At 11:59 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 14.33 points, or 0.04%, at 33,587.61, and the S&P 500 (.SPX) was down 12.17 points, or 0.28%, at 4,271.68, and the Nasdaq index. The Composite Index (.IXIC) fell 97.80 points, or 0.74%, to 13,178.62 points.

Among other stocks, Yext Inc rose 36.1% after the New York-based internet marketing company raised its annual earnings forecast.

Campbell Soup (CPB.N) fell 6.3% after the packaged food maker reported a decline in gross margin for the third quarter, dragged down by higher commodity and freight costs.

Shares of Coinbase (COIN.O) rose 2.2% after hitting a seven-month low on Tuesday as the Securities and Exchange Commission sued the largest cryptocurrency exchange in the United States, accusing it of operating illegally, without being registered. at the organizer.

Cathy Wood’s Ark Invest bought 419,324 shares of Coinbase on Tuesday.

Advance issues outnumber losers by 2.04 to 1 on the New York Stock Exchange and by 1.37 to 1 on the Nasdaq.

The S&P posted 17 new highs in 52 weeks without a new low, while the Nasdaq recorded 109 new highs and 23 new lows.

Additional reporting by Shubham Batra and Shristi Ashar in Bengaluru; Editing by Vinay Dwivedi

Our standards: Thomson Reuters Trust Principles.