Wall Street takes a hit as Apple, Amazon slide

The S&P 500 financials index fell 1.4 per cent, a day after the Federal Reserve pledged to keep interest rates low for a prolonged period to lift the world’s biggest economy out of a pandemic-induced recession. Banks tend to benefit from higher borrowing costs.

Adding to concerns around a stalling recovery, the Labor Department’s report showed the number of Americans filing new claims for unemployment benefits fell last week, but remained perched at extremely high levels.

In late trade, the Dow Jones is 0.9 per cent lower, the S&P 500 has lost 1.3 per cent and the Nasdaq has dropped 1.6 per cent. Despite the weak lead, the ASX is set to open higher, with futures at 5.01am AEST pointing to a gain of 9 points, or 0.2 per cent, at the open.

Fed Chair Jerome Powell laid out a menu of factors – including wage growth, workforce participation and disparities in minority joblessness relative to whites – that must be satisfied before the Fed would view the economy at maximum employment, and thus even consider raising interest rates.

“Investors love when the Fed lowers rates, because they feel that’s good for market,” Dollarhide said. “But if the Fed says we need to keep rates low for longer, then people start worrying about the economy itself.”

General Electric Co rose 3.7 per cent after Chief Executive Officer Larry Culp said on Wednesday the company’s free cash flow would turn positive in the second half.

Ford Motor Co added 3.3 per cent as it said it had begun production of the new generation F-150 pickup truck at its Michigan facility.

Declining issues outnumbered advancing ones on the NYSE by a 1.86-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favoured decliners.

The S&P 500 posted 7 new 52-week highs and no new lows; the Nasdaq Composite recorded 36 new highs and 16 new lows.