US STOCKS-S&P 500, Nasdaq fall as tech shares give up gains

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.) * Netflix gains after Wells Fargo PT raise * Coinbase rebounds day after hitting seven-month low * Indexes: Dow up 0.04%, S&P down 0.28%, Nasdaq down 0.74% (Updates prices throughout) By Shubham Batra, Shristi Achar A and David Carnevali June 7 (Reuters) - U.S. stocks fell on Wednesday as a rotation out of technology stocks dragged on the Nasdaq, while the S&P 500 slid on profit-taking ahead of key economic and policy events next week.

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.) *

Netflix gains after Wells Fargo PT raise *

Coinbase rebounds day after hitting seven-month low *

Indexes: Dow up 0.04%, S&P down 0.28%, Nasdaq down 0.74% (Updates prices throughout)

By Shubham Batra, Shristi Achar A and David Carnevali June 7 (Reuters) -

U.S. stocks fell on Wednesday as a rotation out of technology stocks dragged on the Nasdaq, while the S&P 500 slid on profit-taking ahead of key economic and policy events next week. U.S. inflation data is expected to show consumer prices eased slightly in May on a month-over-month basis but with elevated core prices.

Weighing on stocks, the two-year U.S. Treasury yield and benchmark 10-year yield climbed after the Bank of Canada raised interest rates, adding to market apprehension around the Federal Reserve's next interest rate decision. "Over the past week, we've seen a pretty dramatic outperformance of small caps relative to large caps," said Paul Baiocchi, investment firm SS&C ALPS Advisors chief ETF strategist. "We're seeing that persist here today."

The small-cap index Russell 2000 jumped 1.60% as investors kept moving away from megagap and growth stocks after their recent run. The S&P 500 Growth index fell 0.62%. Money market participants now see a 69% chance that the U.S. central bank will skip raising interest rates in its June meeting but will hike in July, down from nearly 77% earlier, according to the CME's Fedwatch tool.

U.S. shares have recently been boosted by a megacap stocks rally and a stronger-than-expected earnings season, with the S&P 500 up almost 20% from its October 2022 lows. Some analysts expect profit-taking soon in big tech and other major growth stocks.

Meanwhile, CBOE Volatility Index hit the lowest since Feb. 14, 2020 at 13.84. Wells Fargo raised the price target on Netflix shares to $500 from $400, the highest on Wall Street, according to Refinitiv. The streaming company advanced 0.73%.

Energy index rose 2.62% after oil prices edged higher, while the KBW Regional Banking Index hit a 2-month high. The Dow Jones Industrial Average rose 71.82 points, or 0.21%, to 33,645.1, the S&P 500 lost 11.76 points, or 0.27%, at 4,272.09 and the Nasdaq Composite dropped 123.83 points, or 0.93%, to 13,152.59.

Yext Inc soared 39.58% after the New York-based online marketing firm raised its annual earnings forecast. Campbell Soup fell 7.90% after the packaged food maker posted a lower fiscal third-quarter gross margin, dented by high commodity and freight costs.

Coinbase shares rose 3.08% after hitting a seven-month low on Tuesday as the Securities and Exchange Commission sued the largest U.S. crypto exchange, accusing it of operating illegally, without having first registered with regulator. Cathie Wood's Ark Invest bought 419,324 shares of Coinbase on Tuesday.

Advancing issues outnumbered decliners on the NYSE by a 1.76-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored advancers. The S&P 500 posted 19 new 52-week highs and no new lows; the Nasdaq Composite recorded 114 new highs and 30 new lows.