Bond fears overtake Fed hopes, US stocks fall at open

NEW YORK: An uptick in bond yields caused suffering at the opening of Wall Street trading on Thursday, with tech stocks slumping even as the Dow built on its record-setting close.

Markets powered to a record finish on Wednesday after the Federal Reserve made it known that it would keep its easy money policies in place for the forseeable future, but that euphoria evaporated as trading resumed.

Thursday's boogeyman was a familiar one: the yield on the 10-year US Treasury bond, which ticked above 1.7 percent as investors signaled their fears of an inflationary spike caused by the US economy's presumed healing from the Covid-19 downturn.

"The thinking overnight is that, 'the Fed risks playing with inflation fire and we don't like it,'" Patrick O'Hare of Briefing.com said.

"The implication is that the stock market doesn't like so much what the Treasury market is thinking, because the jump in long-term rates is a threat to the high-multiple growth stocks."

About 20 minutes into trading, the benchmark Dow Jones Industrial Average was up 0.1 percent at 33,039.43.

The broad-based S&P 500 slipped from its record the day before, falling 0.6 percent to 3,948.72, while the tech-rich Nasdaq Composite Index fell 0.2 percent to 15,699.32.

Shares of leading tech firms felt the pain, with Facebook dropping 1.5 percent and Apple losing 2.2 percent. Tesla was down 3.3 percent.