Tech stocks sank on Friday after bond yields rose again, as traders worried a stronger US economy in months ahead could prompt the Federal Reserve to raise rates sooner than expected.
Wall Street has been nervously eyeing yields on Treasury securities, fearing a sustained uptick will force the central bank to end stimulus and easy money policies that have allowed equities to rally over the past months even as the pandemic hammered the wider US economy.
With the 10-year Treasury bond yield moving back above 1.6 percent, the tech-rich Nasdaq Composite Index fell 1.3 percent to 13,218.58 about 20 minutes into trading.
The broad-based S&P 500 lost 0.3 percent to trade at 3,926.30, down from its record close on Thursday, while the benchmark Dow Jones Industrial Average climbed 0.3 percent to 32,596.10, extending its record.
Patrick O’Hare of Briefing.com said the yield concerns and President Joe Biden’s vow after markets closed Thursday to make all adults eligible for Covid-19 vaccines by May 1 pushed traders away from growth stocks like tech, and towards companies that will benefit from the economy reopening.
“The translation by the ... market is, ‘here we go again ... the reopening trade is on,” he said.
Tesla dropped 3.1 percent, while Apple lost 2.1 percent and Microsoft 1.2 percent.
Boeing rose 1.9 percent after the company said US investment firm 777 Partners ordered 24 of its 737 MAX 8 aircraft -- with a price tag of $2.9 billion -- with an option to buy 60 more.