Nasdaq futures drop about 1per cent as bond yields spike

REUTERS: Nasdaq 100 futures fell more than 1per cent on Thursday as bond yields jumped to 14-month highs after the Federal Reserve pledged to look past inflation for a while and keep monetary policy loose through 2023.

Yield-sensitive tech stocks such as Apple Inc, Facebook Inc, Netflix Inc, Amazon.com Inc and Microsoft Corp dropped between 0.8per cent and 1.7per cent in premarket trading.

The Dow on Wednesday surpassed 33,000 points for the first time after the Fed projected strongest growth in nearly 40 years as the COVID-19 crisis winds down, and repeated its pledge to keep its target interest rate near zero for years to come.

While inflation is expected to exceed the Fed's 2.0per cent target to 2.4per cent this year, Fed Chair Jerome Powell views it as a temporary surge that will not change the central bank's stance.

A US$1.9 trillion spending stimulus sparked fears of rising inflation that triggered a jump in longer end Treasuries that led a rotation into value stocks at the cost of high-growth tech stocks.

Big U.S. banks, that are sensitive to economic outlook, including JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc and Goldman Sachs were among the top gainers in early premarket trade.

At 06:26 a.m. ET, Dow E-minis were up 46 points, or 0.14per cent, S&P 500 E-minis were down 15.75 points, or 0.4per cent, and Nasdaq 100 E-minis were down 142.75 points, or 1.08per cent.

(Reporting by Shashank Nayar in Bengaluru; Editing by Shounak Dasgupta)