Banks were among top performers among financials, with the S&P 500 bank index up 2.6 percent following a rise in the benchmark US 10-year Treasury yield, which touched its highest level since April 2021. Higher interest rates can increase profit margins for banks and financial firms.
Shares of Meta Platforms jumped 2.6 percent, the biggest boost to the S&P 500 and Nasdaq.
The Dow ended down 0.5 percent and the heavily weighted S&P 500 technology sector also eased 0.5 percent. The tech sector was biggest drag on the S&P 500 on Wednesday when minutes from the Fed’s December meeting signaled the possibility of sooner-than-expected interest rate hikes.
The Fed minutes cited a “very tight” job market and unabated inflation, increasing investor unease ahead of Friday’s monthly jobs report from the US Labour Department.
“We have a jobs report tomorrow, which continues to be a focal area for the market in terms of the progression of the labour market,” said Bill Northey, senior investment director at US Bank Wealth Management.
A private payrolls report on Wednesday was stronger than expected.
The Dow Jones Industrial Average fell 0.47 percent, to 36,236, the S&P 500 lost 0.10 percent, to 4,696 and the Nasdaq Composite dropped 0.13 percent, to 15,081.
Investors this week have mostly rotated out of technology-heavy growth shares and into more value-oriented stocks that tend to do better in a high interest-rate environment.
Netflix ended down 2.5 percent after JP Morgan cut its price target on the movie streaming platform’s stock. (Reuters)