WALL Street was on track to open lower on Thursday as the Federal Reserve signaled that borrowing costs could increase further this year after it skipped raising them in its latest meeting.

The Fed left rates unchanged at the 5%-5.25% range on Wednesday, but indicated they could rise by at least half a percentage point this year as inflation remains stubbornly persistent and the U.S. economy stays resilient.

Traders see a 69% chance of a 25-basis-point rate hike in July, up from around 60% a day earlier, according to the CME Fedwatch tool.

“What has been encouraging is that the rate market has significantly reassessed the trajectory of expected interest rates but the equity market has largely ignored that and, if anything, continued to rise on the belief that the Fed is at or near the end of the rate hike cycle,” said Ronald Temple, chief market strategist at Lazard.

“I do think yesterday’s message was a bit of a splash of cold water on equity markets.”

Meanwhile, data showed U.S. retail sales unexpectedly rose in May as consumers spent on a range of goods including vehicles, which could help support the economy this quarter.

Another set of numbers showed initial claims for state unemployment benefits were steady at a seasonally adjusted 262,0000 for the week ended June 10. Economists polled by Reuters had forecast 249,000 claims for the latest week.

The S&P 500 and Nasdaq rose for a fifth consecutive session on Wednesday, while the Dow ended down following the Fed decision.

Market heavyweights Apple, Nvidia and Amazon.com fell between 0.2% and 1.2% in premarket trading.

Shares of Tesla dipped 3.0%. The stock snapped a record 13-day streak of gains in the previous session.

At 8:58 a.m. ET, Dow e-minis were down 40 points, or 0.12%, S&P 500 e-minis were down 13.75 points, or 0.31%, and Nasdaq 100 e-minis were down 77.25 points, or 0.51%.

Kohls Corp added 3.1% after TD Cowen upgraded the department store operator to “outperform” from “market perform”.

U.S.-listed shares of Chinese companies such as Alibaba Group and JD.com rose almost 2% after the People’s Bank of China cut the borrowing cost for its medium-term policy loans for the first time in 10 months. – Reuters