Wall Street falls after slide in Big Tech stocks; Dow declines 500 pts

Wall Street’s main indexes fell on Friday as big technology-related shares tumbled, reeling from the Federal Reserve’s decision to end its pandemic-era stimulus faster.

An announcement from the Fed this week signaling three quarter-percentage-point interest rate hikes by the end of 2022 to combat surging inflation put pressure on heavyweight tech stocks.

Growth stocks including Apple Inc, Meta Platforms , Amazon.com Inc and Microsoft Corp fell

between 0.5% and 1.2%.

Nine of the 11 major S&P 500 sector indexes fell in early trading, with a 0.9% decline in technology stocks weighing the most on the benchmark index.

Value-oriented sectors including financials and energy, which bounced after the Fed’s announcement, fell more than 2% each.

“It was an explicitly hawkish (Fed) meeting on Wednesday, there’s no two ways about it,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

“A lot of people that came in high cash positions and or hedged against tech in case the Fed was more hawkish than expected breathed a sigh of relief in the short term or covered their shorts.”

The Nasdaq index is now set to end the week 3.6% lower, while the S&P 500 tracked declines of nearly 2%.

Still, most heavyweight growth stocks have outperformed the broader market in 2021, with the Philadelphia SE Semiconductor index adding nearly 35%. The benchmark S&P 500 index gained 23% in the same period.

Global stocks also retreated on Friday on concerns about the fast-spreading Omicron variant of the coronavirus, which has impacted global trading sentiment since late November.

At 9:58 a.m. ET, the Dow Jones Industrial Average was down 508.31 points, or 1.42%, at 35,389.33, the S&P 500 was down 48.97 points, or 1.05%, at 4,619.70 and the Nasdaq Composite was down 117.80 points, or 0.78%, at 15,062.63.

The simultaneous expiration of stock options, stock index futures and index options contracts later in the day, known as triple witching, is expected to cause volatility through the trading session.

Oracle fell 5.2% after a report said the enterprise software maker is in talks to buy electronic medical records company Cerner in a deal that could be valued at $30 billion. Shares of Cerner surged 12.9%.

FedEx Corp rose 7.3% after the delivery firm reinstated its original fiscal 2022 forecast on Thursday, even as persistent labor woes chipped away profits. Shares of peer United Parcel Service also gained 0.9%.

Declining issues outnumbered advancers for a 3.62-to-1 ratio on the NYSE and for a 2.71-to-1 ratio on the Nasdaq.

The S&P index recorded 16 new 52-week highs and five new lows, while the Nasdaq recorded five new highs and 266 new lows.

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