Stock Futures Slip With Tech Leading Losses

The yield on 10-year Treasury notes rose to 1.666%, from 1.641% Tuesday. Yields rise when bond prices fall.

Stocks have wobbled in recent days amid concerns that higher inflation will prompt the Fed to unwind some of the support it has doled out to markets since early 2020. Fed officials have pushed back against that prospect, saying the economy is still in recovery mode and requires near-zero interest rates along with $120 billion a month in bond purchases.

“The key driver now is the central banks,” said Nadège Dufossé, head of cross-asset strategy at Candriam. She expects the Fed to hold off on providing guidance about tapering stimulus until September, by which time data should give a clearer picture of the outlook for inflation.

Stocks are likely to be volatile and could experience a 10% correction meanwhile, Ms. Dufossé said, though she added the market is drawing support from strong earnings growth and evidence that coronavirus vaccines are highly effective. The S&P 500 closed just 2.5% below its all-time high on Tuesday, despite falling for five of the past seven trading days.

Investors will seek to glean clues about the Fed’s thinking when minutes of its April meeting are published at 2 p.m. ET. Officials voted unanimously to maintain the central bank’s policies, aimed at holding down borrowing costs, and Chairman

Jerome Powell

said the recovery remained uneven and incomplete.

Since then, data showed a jump in inflation in April, sparking jitters in the stock market. Technology stocks—a beneficiary of low rates because their earnings are expected to stretch far into the future—have been particularly sensitive to the prospect of a rise in borrowing costs.

There is “some concern about what the Fed might be doing over the coming months and quarters when it comes to asset tapering,” said Paul Jackson, head of asset allocation research at Invesco, referring to trimming the bond-buying program.

“The U.S. economy is rebounding very, very strongly,” Mr. Jackson added. “That, by itself, should make the Fed feel more comfortable that it doesn’t need to be providing as much support as it is.”

Commodity markets retreated. Futures for West Texas Intermediate, the main grade of U.S. crude oil, fell 1.9% to $64.28 a barrel.

Bitcoin fell to as low as $38,585.86, its lowest since February, according to CoinDesk. The recent price fall has accelerated after three Chinese entities published a statement that financial institutions should not accept virtual currencies for payment or provide services using them.

Overseas markets broadly moved lower. The Stoxx Europe 600 fell 1.4%, weighed down by shares of basic-resource, oil-and-gas and technology companies. Miners BHP Group and

Anglo American

each slid more than 2% as copper prices slipped.

In Asia, the Shanghai Composite Index fell 0.5% by the close while Japan’s Nikkei 225 lost 1.3%.

Write to Joe Wallace at Joe.Wallace@wsj.com