Technology shares on wall street jumped on Thursday on optimism around a speedy economic recovery, although the Federal Reserve’s unexpectedly hawkish message on monetary policy kept the S&P 500 subdued.
Five of the 11 S&P indexes were down in late morning trade, while information technology rose the most among gainers.
Chipmaker Nvidia Corp jumped 5.5%, leading the charge among technology behemoths after Jefferies raised its price target on the stock.
Technology shares, which generally perform better when interest rates are low, powered a rally on Wall Street last year as investors flocked to stocks seen as relatively safe during times of economic turmoil.
The group has come under pressure this year on fears that rising inflation would lead the Fed to hike interest rates sooner than expected. The central bank on Wednesday moved its first projected rate increases from 2024 into 2023.
Still, shares of Apple Inc, Microsoft Corp, Amazon.com Inc and Facebook Inc reversed premarket declines to rise between 0.3% and 1.4% as investors bet that a steady economic rebound would boost demand for their products in the long run.
“Yes there is rising inflation but the market is focusing more on the positives of improving earnings, robust GDP growth and the wider economy getting stronger,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas.
“Today’s action is indicative that the Fed hasn’t said anything that the market didn’t already know.”
Wall Street Index Overview
At 11:44 a.m. ET, the Dow Jones Industrial Average was down 192.50 points, or 0.57%, at 33,841.17 and the S&P 500 was up 2.35 points, or 0.06%, at 4,226.05. The Nasdaq Composite was up 152.87 points, or 1.09%, at 14,192.55.
Interest rate-sensitive bank stocks slumped 3.4% as the longer dated U.S. Treasury yields dropped.
Other economically sensitive stocks including materials and energy fell more than 2% as data showed the jobless claims rising last week for the first time in more than a month. Still, layoffs appeared to be easing amid a reopening economy and a shortage of people willing to work.
“In the balance of June and into the summer we anticipate continued volatility as we get more signals from economic data, Fed policy and as we get into the earnings season,” said Greg Bassuk, chief executive officer at AXS Investments in New York.
In corporate news, U.S.-listed shares of CureVac NV sank 41% during wall street trading after the German biotech said its COVID-19 vaccine was 47% effective in a late-stage trial, missing the study’s main goal.
Ford Motor Co slipped 0.7% on wall street even as it said an improvement in its automotive business would help it post second-quarter adjusted operating earnings above its expectations.
Declining issues outnumbered advancers for a 1.88-to-1 ratio on the NYSE. Advancing issues outnumbered decliners by a 1.04-to-1 ratio on the Nasdaq.
The S&P index recorded 16 new 52-week highs and two new lows, while the Nasdaq recorded 66 new highs and 21 new lows.