The S&P 500 was weighed down by tech stocks on Wednesday while bond yields continued to advance, according to a report.
- The S&P 500 dropped 1.3% to 3,819.72, while the Nasdaq Composite fell 2.7% to 12,997.75. The Dow Jones Industrial Average closed down 121.43 points or 0.4% to 31,270.09, near its session low.
- Apple, Amazon, Microsoft, and Alphabet all declined over 2%; Netflix shed 5%.
- The weakness came as 10-year Treasury yields climbed over 8 basis points to a high of 1.49%. Yields surged to a high of 1.6% last week.
- Concerns about equity valuations and inflation acceleration are rising due to the rise in bond yields. Higher yields can hit tech stocks as they rely on easy borrowing.
- Growing optimism over the COVID-19 vaccine rollout drove cyclical stocks up. American Airlines 3.4%, Carnival jumped 3.9%, and Norwegian Cruise Line grew 6.3%. The energy sector rose 1.4%.