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Tech Futures Slip Ahead of Fed Meeting – The Wall Street Journal

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Technology companies led losses among U.S. stocks in early trading as investors awaited the Federal Reserve’s latest economic outlook and any signals on interest rates and bond purchases for the next few years.

The tech-heavy Nasdaq Composite slipped 1%, while the S&P 500 fell 0.4%. The Dow Jones Industrial Average were relatively flat, suggesting a choppy day may lie ahead for stocks. The S&P 500 and the Dow Jones index posted tepid declines Tuesday, a day after closing at records.

Federal Reserve officials, who are scheduled to release their latest economic projections at 2 p.m. ET, are likely to say they expect the labor market and inflation to rebound faster than they anticipated in December. The central bank is broadly expected to reaffirm its commitment to ultralow interest rates and bond purchases for now.

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Money managers have already started pricing in a rise in inflation, leading to a selloff in government bonds, and are betting that interest rates will start climbing by the end of next year. They have also started exiting stocks that look to be too richly valued after last year’s rally.

“Markets across the board are expensive today, and that is pinned on central bank support,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management. “So this whole market is very, very sensitive to changes in central bank policy.”

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