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Tech stocks pull indexes down on Wall Street; eyes on the Fed



NEW YORK (AP) — Stocks are opening lower on Wall Street and bond yields are rising again as investors try to predict how quickly the Federal Reserve will move to pull back support for the economy and fight inflation. Tech companies, including chip makers, took some of the biggest hits early Wednesday, pushing the Nasdaq composition down 1.7%. The broader S&P 500 index gained 1.1%. The Dow Jones Industrial Average fell 0.9%. Investors will be looking closely at the minutes of the Fed’s last policy meeting, which will be released later in the day, for more clues about next steps.

US markets were on track to open lower on Wednesday after a Federal Reserve official’s comments fueled expectations for more aggressive rate hikes and the White House announced more sanctions on Russia.

S&P 500 futures fell 0.9% on Wall Street, and same futures for the Dow Jones Industrial Average fell 0.7%.

London and Frankfurt shares fell sharply in midday trading. Tokyo and Hong Kong fell, while Shanghai changed little. Oil prices rose more than $1 a barrel and nearly reversed Tuesday’s losses.

Wall Street’s S&P 500 index fell 1.3% on Tuesday after Fed Chairman Lael Brainard said reining in inflation at its four-year high was “very important”. Brainard said the Fed will continue to raise rates after its first rate hike in March in four years and may decide to “rapidly” reduce its bond holdings at its May meeting.

Wall Street is watching for clues about how sharply interest rates will rise. On Wednesday, the Fed will release the minutes of its March interest rate meeting.

The White House said Western governments would ban new investments in Russia after evidence that its troops were deliberately killing civilians in Ukraine. The U.S. Treasury said President Vladimir Putin’s government would be prevented from repaying debt with dollars from American financial institutions, potentially increasing the risk of default.

European governments have resisted Putin’s calls to boycott Russian gas, the biggest export earner, because of the potential impact on their economy.

“It’s hard to be particularly optimistic” about the war, “but we live in hope,” Oanda’s Craig Erlam said in a report. Despite inflation, interest rate hikes and higher commodity prices, “and investors seem to be too.”

In midday trading, the DAX in Frankfurt and the CAC 40 in Paris both lost 2%. The London FTSE fell 0.3%.

In Asian trade, Hang Seng in Hong Kong fell 1.9% to 22,080.52 and Tokyo’s Nikkei 225 fell 1.6% to 27,350.30. The Shanghai Composite Index fell less than 0.1% to 3,283.43 after spending most of the day in negative territory.

Kospi in Seoul fell 0.9% to 2,735.30 and Sydney’s S&P-ASX 200 fell 0.5% to 7,490.10.

India’s Sensex index fell 0.9% to 59,629.07. New Zealand and Southeast Asian markets also retreated.

Traders are pricing in about a 78% probability that the Fed will raise its key rate by half a point at its next meeting in May. That would be twice the usual margin of change and a step the Fed has not taken since 2000.

Higher interest rates tend to hurt stocks seen as the most expensive, shifting the focus to big tech and other high-growth stocks. On Wall Street, Apple and Tesla were some of the biggest weights on the market Tuesday.

Benchmark US oil rose $1.07 per barrel to $103.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.32 to $101.96 on Tuesday. Brent crude, the price basis for international oil trade, rose 78 cents to $107.42 a barrel, to $107.42 a barrel in London. It fell 89 cents to $106.64 in the previous session.

The dollar rose from 123.61 yen on Tuesday to 123.90 Japanese yen. The euro rose from $1.0905 to $1.0918.





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