Wall Street set to open lower as tech rally loses steam

The logo of Microsoft is seen at an office building in Wallisellen, Switzerland December 21, 2020. REUTERS/Arnd Wiegmann

June 8 (Reuters) – Wall Street’s main indexes were set to open lower on Wednesday as a rally in technology and growth stocks from the previous session eased, while higher oil prices stoked worries of a further rise in global inflation.

Microsoft Corp (MSFT.O) and Apple Inc (AAPL.O) edged 0.2% lower in premarket trading after gaining more than 1% each on Tuesday.

The rate-sensitive growth stocks also came under pressure from elevated Treasury yields, with the benchmark 10-year back above 3%.

Against the backdrop of rising borrowing costs, investor will this week squarely focus on the consumer price index data due on Friday.

A hot reading would likely spook markets already worried about how the U.S. Federal Reserve will balance growth and inflation as it withdraws its pandemic-era policy support to the economy.

Volatility has gripped Wall Street in recent sessions as market participants debated whether the market has hit a bottom in the wake of a sharp selloff this year.

“You are just going to see more choppiness, there isn’t really any breakthrough news in the market, both in terms of earnings and economics,” said Rick Meckler, a partner at Cherry Lane Investments.

“All you’re seeing is people rearranging some positions and to some extent waiting for a better indication that perhaps inflation will come off in recent times. Investors are concerned with where energy prices could be headed.”

Oil prices rose on Wednesday, with Brent Crude nearing $122 a barrel.

The benchmark S&P 500 index (.SPX) has climbed 9.2% since May 20 after falling as much 20.05% so far this year. It was last down 12.7% for the year, the blue-chip Dow (.DJI) declined 8.7% and the tech-heavy Nasdaq (.IXIC) has shed 22.2%.

The CBOE volatility index (.VIX) was up and last trading at 24.44 points, above its long-term average of about 20 points.

At 8:12 a.m. ET, Dow e-minis were down 122 points, or 0.37%, S&P 500 e-minis were down 13 points, or 0.31%, and Nasdaq 100 e-minis were down 29.5 points, or 0.23%.

Carnival Corp (CCL.N) slid 2.2% after Morgan Stanley cut its price target on the cruise operator’s stock.

Intel Corp (INTC.O) dipped 3.2% after a bearish brokerage report from Citi said the chipmaker could make negative pre-announcement or miss second-quarter forecasts as circumstances worsen.

Spirit Airlines Inc (SAVE.N) slipped 0.7% after it delayed a shareholder meeting to vote on its proposed merger agreement with Frontier Group Holdings Inc (ULCC.O). read more

Western Digital Corp (WDC.O) rose 4.5% after the memory storage devices maker said it was reviewing options, including splitting its flash-memory and HDD businesses. read more

Campbell Soup Co (CPB.N) added 3% after the package food maker raised its annual core sales forecast on higher prices and robust demand for its broths and sauces. read more

Reporting by Devik Jain and Mehnaz Yasmin in Bengaluru; Editing by Arun Koyyur

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