US: Tech shares lead stocks down ahead of Federal Reserve decision

[NEW YORK] Wall Street stocks tumbled on Tuesday, with tech shares especially weak as markets awaited a key Federal Reserve decision amid lingering worries over the latest Covid-19 strain.

Investors are girding for more details on just how fast the Fed will scale back its stimulus, and the timing of when the first interest rate hikes will come.

Fresh producer pricing data showing sharply higher inflation added to expectations for a more hawkish posture by the US central bank when it concludes its two-day meeting Wednesday.

The Dow Jones Industrial Average dipped 0.3 percent to 35,544.18.

The broad-based S&P 500 shed 0.7 per cent to 4,634.09, while the tech-rich Nasdaq Composite Index fell 1.1 per cent to 15,237.64.

Besides the Fed, investors are skittish over the latest Covid-19 variant Omicron as more governments enact fresh restrictions, said Briefing.com analyst Patrick O'Hare.

"There's still a lingering concern that it can have an adverse impact to the extent that people might cancel travel or entertainment," O'Hare said, adding that markets were also in "consolidation" mode after last week's rally.

Tech shares had a difficult session, with Adobe falling 6.6 per cent, Microsoft off 3.3 per cent and Cisco Systems and Booking Holdings both dropping more than one per cent.

Pfizer rose 0.6 per cent after the drugmaker announced clinical trials that confirmed its Covid-19 pill drastically reduced hospitalisations and death from the virus, and also combats effects from Omicron.

AFP