Higher Bond Yields Weaken Wall Street Tech Stocks

Technology companies led a broad slide in stocks on Wall Street Tuesday (Wednesday, Sept. 29, 2021, in Manila), deepening the market’s September swoon, Damian J. Troise, Alex Veiga, and Stan Choe reported for the Associated Press (AP).

Photo Insert: The Treasury yields rise has cast a huge shadow over the US stock market as investors are forced to reassess whether prices have run too high for stocks, particularly the most popular ones.

The S&P 500 fell 2%, its worst drop since May. The tech-heavy Nasdaq dropped 2.8%, its biggest drop since March. Decliners outnumbered advancers on the New York Stock Exchange 4 to 1. The benchmark S&P 500 is down 3.8% so far this month and on pace for its first monthly loss since January.

The September slump has been an exception to a mostly steady stream of gains so far this year that has brought the S&P 500 up 15.9% since the beginning of 2021.

The selling came as a swift rise in Treasury yields forces investors to reassess whether prices have run too high for stocks, particularly the most popular ones. The yield on the 10-year Treasury note, a benchmark for many kinds of loans including mortgages, jumped to 1.54%. That’s its highest level since late June and up from 1.32% a week ago.

The S&P 500 fell 90.48 points to 4,352.63. The Dow Jones Industrial Average fell 569.38 points, or 1.6%, to 34,299.99. The blue-chip index briefly fell 614 points. Small-company stocks also lost ground.

The Russell 2000 index dropped 51.23 points, or 2.2%, to 2,229.78. this week’s swoon for the market is reminiscent of an episode early this year when expectations for rising inflation and a stronger economy sent Treasury yields climbing sharply. The 10-year yield jumped to nearly 1.75% in March after starting the year around 0.90%. Tech stocks also took the brunt of that downturn.

Chipmaker Nvidia fell 4.4%, Apple slid 2.4% and Microsoft fell 3.6%. The broader technology sector has also been contending with a global chip and parts shortage because of the virus pandemic and that could get more severe as a power crunch in some parts of China shuts down factories.

Communications companies also weighed down the market. Facebook and Google’s parent company, Alphabet, each fell 3.7%. Energy was the only sector in the S&P 500 that wasn’t in the red. Exxon Mobil rose 1% and Schlumberger gained 2.4% for the biggest gain among S&P 500 stocks.

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