01:14 PM EST, 12/13/2024 (MT Newswires) -- US equity indexes fell midday Friday as gains in government bond yields trained investors' focus on rate expectations built into next week's dot plot, damping risk sentiment following Broadcom's ( AVGO ) blistering rally.

The S&P 500 slid 0.2% to 6,040.3, with the Nasdaq Composite down 0.2% to 19,859.5 and the Dow Jones Industrial Average 0.2% lower at 43,830.7.

Technology gave up gains after topping the sector charts earlier in the session. Communication services, another sector sensitive to the movement in Treasury yields, led the steepest decliners. Consumer staples, healthcare, and utilities were the trio of gainers, reflecting a classic defensive tilt.

In premarket activity Friday, the Nasdaq was up about 175 points, and the Dow and the S&P 500 also surged, following Broadcom's ( AVGO ) fiscal Q4 results overnight. Boosting its price target on the company to $233 from $180 and maintaining its overweight rating, Morgan Stanley said the chip manufacturer continues to be "one of the most compelling ways" to play AI semiconductors over the next two to three years.

Broadcom ( AVGO ) shares were up more than 20% intraday, leading gainers on the S&P 500 and the Nasdaq.

Meanwhile, the 10-year US Treasury yield was heading for the fifth straight day of gains this week. It soared 6.7 basis points to 4.39% intraday, reflecting the interplay of fresh supply this week, politics relating to tariffs and tax cuts, and the Fed's policy path next year.

Investors are watching the 4.5% level on the 10-year yield ahead of the interest-rate decision on Wednesday. While a so-called hawkish rate cut is 97% priced in, the intrigue will be on signals about what comes in 2025, with just two further cuts priced in for the year, a report from Forexlive said. The Fed's dot plot, which reflects policymakers' expectations for interest rates, will reveal a "bias and offer enlightening comments from officials about how they see inflation unfolding."

The US producer price inflation reading Thursday surprised to the upside, even if the core and the components that feed directly into the core personal consumption expenditures price index were a touch softer, Deutsche Bank said in a research note. However, the year-on-year core PPI rose above 3%, sowing a "bit more doubt about how fast any rate cuts would be next year," Jim Reid, the head of the global fundamental credit strategy at Deutsche Bank, said.

For the S&P 500, Thursday was the ninth day in a row when more constituents fell than rose, the longest such run since 2001, Reid said. "So ex-technology, the market is losing some momentum even if the aggregate moves are still small."

Gold dropped 1.1% to $2,679.82 an ounce, while silver dived 2.2% to $30.98 per ounce.

In economic news Friday, US import prices rose by 0.1% in November, compared with the 0.2% decrease expected in a survey compiled by Bloomberg and a downwardly revised 0.1% increase in October. Export prices were flat in November, compared with expectations for a 0.3% decline and a 1% increase in October.

West Texas Intermediate crude oil futures jumped 1.7% to $71.21 a barrel.