Stocks Drop as Bond Yields Hit Three-Month High; Dow Down 500 Points
U.S. stocks tumbled Tuesday as rising bond yields deepened a rout in shares of technology companies.
The S&P 500 fell 2%, heading for a second straight day of losses. The tech-heavy Nasdaq Composite slid 2.6%, while the Dow Jones Industrial Average shed 547 points, or 1.6%, to 34321.
For much of the past decade, many investors had piled into shares of fast-growing technology companies, wagering they would deliver relatively robust profit growth even in a sluggish economic environment. This week, that trade hit a roadblock.
With the economy out of the worst of the pandemic-fueled crisis, the Federal Reserve signaled last week that it could start to reverse its pandemic stimulus programs as soon as November and raise interest rates sometime next year. That appears to have prompted an unwind of some of the market’s most enduring trades—pushing Treasury yields to their