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.
The S&P 500 fell 0.9%, the Dow Jones Industrial Average gained fell 0.1%, or 29.7 points, the Nasdaq fell 2.5%.
Apple (NASDAQ:AAPL) fell more than 3% leading the rout in big tech as Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB), also ending the day in the red.
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.
Wells Fargo (NYSE:WFC), Bank of New York Mellon (NYSE:BK), Charles Schwab (NYSE:SCHW) were among the biggest gainers as banks' net interest margin will benefit from a rising yield environment.
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.