The S&P 500 dropped Wednesday, weighed down by technology shares, as investors awaited the Federal Reserve’s latest economic outlook and any signals on the future of interest rates and bond purchases.
The broad U.S. stock index slid 0.5%, while the tech-heavy Nasdaq Composite fell 1%. The Dow Jones Industrial Average, meanwhile, edged up 0.1%, or about 46 points.
Shares of big tech stocks helped pull major indexes lower, with Apple retreating more than 2% and Microsoft and Google parent Alphabet falling more than 1%.
Investors in recent weeks have trimmed bets on the technology stocks that soared earlier in the coronavirus pandemic while adding shares of economically sensitive companies that should do well as the vaccine rollout progresses and more fiscal stimulus enters the financial system. Shares of Apple and Amazon.com are down 7.5% and 4.8% this year, respectively, while the energy and financial sectors are leading the S&P 500.
“Tech is the funding source for reallocation,” said Jamie Cox, managing partner for Harris Financial Group. “You’re restoring the allocations that you had pre-pandemic.”