Stock Market Today: Tech Stocks Slip as Bond Yields Rise, Beyond Meat Soars

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Stocks were mostly lower, led by more selling in technology names Wednesday. Markets are awaiting Federal Reserve minutes to be published later in the day and the December jobs report, due on Friday.

By midmorning, the

Dow Jones Industrial Average
was up 35 points, or 0.1%, after the index rose 214 points to close at a new, all-time high of 36,799 Tuesday. The

S&P 500
slipped 0.1%, while the tech-heavy

Nasdaq Composite
was 0.6% lower. The Nasdaq fell 1.3% on Tuesday.

On Wednesday, ADP said the U.S. economy added 807,000 private-sector jobs in December, more than doubling expectations. Wall Street now awaits Friday’s nonfarm payrolls report, which economists expect to reveal 422,000 jobs added.

Markets want to see that people are getting back to work at a brisk pace, but not so quickly that the Federal Reserve would speed up its schedule of interest rate hikes, which are meant to quell inflation. For most of the pandemic, the Fed had been making it easier for households and businesses to borrow money by first lowering interest rates and then buying bonds. Now, the central bank is reversing that policy in order to fight high inflation. 

The Fed will update markets on its monetary policy this afternoon, when minutes of the Fed’s recent meeting will be published. 

When the minutes are released, investors will be looking for cues as to how quickly the Fed might raise rates, when it might starting doing so and, overall, to what degree the recent inflation calls for a rapid shift in monetary policy. “Stocks will fare better if the Fed can tell a credible story about monetary normalization,” wrote Lauren Goodwin, economist and portfolio strategist at New York Life Investments. 

So traders seem to be in wait-and-see mode. The stock market has enjoyed a “Santa Claus rally” recently, in which people fund their retirement accounts and professional money managers position to buy stocks for the new year, sending stocks higher in December. To date, the S&P 500 is up 5% since a Dec. 20 low point. 

Meanwhile, tech stocks are getting hit from a rise in bond yields, with the 10-year Treasury yield up to 1.66% from 1.51% Friday. It’s the yield’s highest level since late November and not far off its pandemic-era high of 1.75%. The Nasdaq is now down 3.3% from its all-time high, hit in late November. Higher bond yields make future profits less valuable and many tech companies are counting on big profits many years down the line.

“Seemingly, the sharp rise in U.S. yields this week has sparked a move from growth to value, or as I put it, from the Nasdaq to the Dow Jones,” said Jeffrey Halley, an analyst at broker Oanda.

Overseas, London’s

FTSE 100
was 0.3% higher and Hong Kong’s

Hang Seng Index
fell 1.6%.

Here are five stocks on the move Wednesday:

Beyond Meat (ticker: BYND) was up 4% after a 5% fall Tuesday. The recent jump came as the company said its plant-based fried chicken product would be available at KFC locations in the U.S. next week.

Pinterest (PINS) stock rose 2.6% after getting upgraded to Overweight from Neutral at Piper Sandler. 

Pfizer (PFE) stock rose 2.1% after getting upgraded to Buy from Neutral at Bank of America. 

Salesforce.com (CRM) stock fell 6% after getting downgraded to Neutral from Buy at UBS. 

Wayfair (W) stock fell 4.4% after getting downgraded to Neutral from Outperform at Wedbush. 

Write to Jack Denton at jack.denton@dowjones.com and Jacob Sonenshine at jacob.sonenshine@barrons.com