March 18 (UPI) — Tech stocks dragged the broader U.S. market down on Thursday as another spike in bond yields scared off investors.
The Dow Jones Industrial Average fell 153.07, or 0.46%, while the S&P 500 dropped 1.48% and the Nasdaq Composite plummetted 3.02% as the 10-year treasury yield climbed 11 basis points to above 1.75% at its session high, its highest level since January 2020.
Additionally, the 30-year rate also increased 6 basis points to rise above 2.5% for the first time since August 2019.
“Risk of rates rising too fast remains a key concern,” Craig Johnson, technical market strategist at Piper Sandler, told CNBC. “Buying pressure has not been equal over the last several weeks as growth stocks lag behind due to headwinds from higher interest rates.”
Apple stock led the way, falling 3.39%, while Alphabet dropped 2.92%, Microsoft declined 2.67% and Facebook slid 1.9%. Tesla stock also fell 6.93%.
Thursday’s losses also came as investors re-evaluated guidance by the Federal Reserve on Wednesday as it kept interest rates close to zero and reiterated its plans to support financial markets until they recover from the COVID-19 pandemic. The Fed also increased its median projections for growth and inflation based on the latest round of federal stimulus.
“This morning, the markets woke up and decided if the Fed is going to keep policy so loose, they want higher risk premium,” Michael Matthews, a fixed-income fund manager at Invesco told The Wall Street Journal.
Bank stocks conversely benefitted from the rise in bond yields as JPMorgan Chase gained 1.64%, Citizens Financial grew 1.57%, Zions Bancorporation dropped 0.97% and Goldman Sachs slid 0.88%.