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S&P 500 falls more than 1% as tech stocks get hit amid a jump in bond yields

Tech stocks dragged down the S&P 500 on Wednesday amid rising bond yields, while names tied to an economic recovery provided the market with some support.

The S&P 500 fell 1.3% to 3,819.72, led by tech and consumer discretionary. The Nasdaq Composite slid 2.7% to 12,997.75 as Apple, Amazon, Microsoft and Alphabet all dropped more than 2%. Netflix shed 5%.The Dow Jones Industrial Average ended the day near its session low, dipping 121.43 points, or 0.4%, to 31,270.09.

The weakness came as the 10-year Treasury yield extended its advance. The benchmark rate climbed more than 8 basis points to a high of 1.49% Wednesday before retreating slightly. Last week, the yield surged to a high of 1.6% in a move that some described as a “flash” spike.

The continuous rise in bond yields is raising concerns about equity valuations and a pickup in inflation. Higher bond yields can hit technology stocks particularly hard as they have been relying on easy borrowing for superior growth.

“Interest rates just won’t cut a break for this market,” Jim Cramer said on CNBC’s “Squawk Alley.”

Reference: CNBC