Rising interest rates spooked investors on Wednesday, who fled from the stock market, concerned about the prospects of a major slowdown in economic growth and corporate profits. Tech stocks were hit particularly hard.
While the Standard & Poor’s 500 Index dropped over 3%, most major tech names lost even more. Apple aapl fell 4%, Google parent Alphabet googl lost 5%, and Amazon amzn dropped 6%. Last month, the e-commerce giant was only the second U.S. public company ever, after Apple, to exceed $1 trillion in stock market value but it has sold off and dropped below that level. At Wednesday’s close, Amazon’s market cap stood at less than $857 billion.
The plunge, which started early in the day but deepened in the afternoon, appeared to be driven by losses in the bond market, which sent interest rates higher. The two-year U.S. Treasury note traded at a yield of more than 2.90%, the highest since 2008. The yield on the 10-year U.S. Treasury note exceeded 3.23%. On Tuesday, that yield reached the highest levels since 2011.