NEW YORK, Jan 6 — Wall Street’s main indexes fell in choppy trading today after minutes from the Federal Reserve’s last meeting struck a hawkish note, pushing down shares of big technology companies and buoying economy-sensitive cyclical sectors.
“Tech stocks have got more of their earnings power coming but they’re much more sensitive to a higher discount rate,” said Dave Grecsek, managing director in investment strategy and research at Aspiriant. The tech-heavy Nasdaq plunged more than 3 per cent yesterday, its biggest one-day percentage drop since February.
So far this week, market participants have rotated out of technology-heavy growth shares and into cyclical names such as industrials, energy and materials that stand to benefit the most in a high interest rate environment. After a stronger-than-expected ADP private payrolls report yesterday, the Labour Department’s more comprehensive nonfarm payrolls data for December will be closely watched tomorrow.