The Dow Jones index gained 0.27% to 33,665.02 points, the tech-dominated Nasdaq fell 1.29% to 13,104.89 points and the broader S&P 500 index gave up 0.38% to 4,267.52 points.

The rotation of investor positions to the detriment of the technology sector, and in particular the Nasdaq 100 which brings together the 100 biggest names in the sector, accelerated in early trading when the Bank of Canada raised rates to the surprise of analysts.

"Stocks declined after Canada's central bank restarted its rate hike campaign, which spooked investors," said Edward Moya of Oanda.

Canada's central bank is often seen as having a proactive role in monetary policy. It was the first to raise rates in 2022 and also the first to pause.

On Wednesday, it raised its main interest rate by 0.25 points to 4.75%, three months after being the first major central bank to pause its tightening.

"The Bank of Canada has signaled that further hikes may occur, which has led everyone to rethink the idea that the U.S. Federal Reserve (Fed) will be done with rate hikes after July," Moya said.

In the bond market, yields on ten-year Treasuries jumped to 3.78% from 3.66%.

Rotation

Adam Sarhan of 50 Park Investment said: "Money is rotating from leading indices like the Nasdaq and Nasdaq 100 to indices that were lagging behind, like the Russell 2000, which brings together small caps.

The Nasdaq 100, which had reached a one-year high on Monday, lost 1.75% while the Russell 2000 gained 1.88%.

"Money flows from one sector to another, that's what keeps the market dynamic and that's good," added the analyst, stressing that the regional banking and retail sectors had been sought.

Regional bank PacWest, once considered the new weak link in the U.S. banking system, jumped 14.37 percent to $9.15.

Nordstrom department stores gained 4.92%, Macy's gained 1.95%.

Technology mega-caps fell sharply, such as Microsoft (-3.09%), Amazon (-4.25%) and Alphabet (-3.89%).

Tesla, on the other hand, gained 1.47% in the wake of an appeal decision by a Delaware court, which again rejected the request of shareholders of the manufacturer denouncing the conditions of the takeover of the manufacturer of solar panels SolarCity.

The food group Campbell Soup, made famous by Andy Warhol, has offloaded 8.91% despite results above expectations and the confirmation of its annual forecasts. However, its margins have eroded.

The cryptocurrency exchange platform Coinbase rallied 3.20% after a difficult day the day before that had seen the title fall by 12.09%.

Targeted by a legal action by the American policeman of the markets, the SEC, which accuses him of not having registered with him, the platform benefited from the announcement of the investment company ARK, which acquired 400,000 Coinbase shares.

© 2023 AFP