Big Tech Logs Worst Three-Day Drop Since February: Markets Wrap

US stocks fell for the third straight day as a global bond market selloff intensified and tamped down enthusiasm for growth-oriented tech giants.

(Bloomberg) — US stocks fell for the third straight day as a global bond market selloff intensified and tamped down enthusiasm for growth-oriented tech giants.  

The Nasdaq 100 fell 3.2% in its worst three-day slide since February. Investors are losing faith that the Federal Reserve is done raising interest rates after minutes from the last meeting suggested officials are considering tighter policy. The 10-year Treasury yield rose as high as 4.33% within a few basis points of its 2022 highs. 

So far the stock slump has been more muted than similar eras of elevated real rates, according to Tom Garretson, a senior portfolio strategist with RBC Wealth Management.

“Tech stocks — and certainly equities broadly — are feeling the weight of rising real yields, but thus far not to the extent that we have seen during past episodes of rising yields,” Garretson said in an interview. “During past periods over the last three years of similar rises in real yields, we have seen tech pull back by about 7% to 15%.”

Data from before the New York market opened showed the labor market remains healthy, doing little to change the narrative that more Fed tightening may be in store. 

“This week’s data hasn’t given them any reason to let their guard down,” said Mike Loewengart at Morgan Stanley Global Investment Office. “With housing starts, retail sales, and jobless claims all reinforcing the picture of a robust economy, another rate hike can’t be ruled out, even if the Fed remains on hold next month.”

Wall Street’s fear gauge, the Cboe Volatility Index or VIX, touched 18 for the first time in seven sessions. The VIX hasn’t reached above 30 — a level considered a sign of heightened volatility — since a series of bank failures rocked the market in March.

Investors will soon be turning to next week’s gathering of policy makers at Jackson Hole in Wyoming to gauge Fed sentiment. 

The moves across bond markets have been sharp and swift this week. Treasuries have been a key driver of the global debt selloff as resilience of the world’s largest economy defies expectations that a run of Federal Reserve interest-rate hikes would spark a recession.

Read More: Global Yields March to 15-Year Highs as Rate-Hike Worries Build

“Our baseline is the Fed will not likely alter rates at the next meeting but the following meeting decision is yet to be determined,” Jeffrey Roach, chief economist at LPL Financial, wrote. “Treasury yields are hitting new highs as investors reset expectations about long-term inflation.”

In the UK, the surge in gilt yields comes after sticky inflation and strong wage data boosted investor bets that the Bank of England will need to raise interest rates further to 6% and keep them high for longer. Japan’s 20-year bond yield surged after a debt auction drew tepid investor demand.

China also continued to weigh on sentiment. The picture emerging from property agents and private data providers suggest the slump in the real estate market may be worse than official reports show. 

China ramped up its efforts to stem losses in its currency on Thursday by offering the most forceful guidance since October through its daily reference rate for the managed currency. Authorities told state-owned banks to step up intervention in the currency market this week, in a push to prevent a surge in yuan volatility, according to people familiar with the matter.

Meanwhile, the dollar took a breather from a five-day climb while the pound continued to outperform. Crude halted a three-day drop.

Key events this week

  • Eurozone CPI, Friday

Some of the main moves in markets:


  • The S&P 500 fell 0.8% as of 4:01 p.m. New York time
  • The Nasdaq 100 fell 1.1%
  • The Dow Jones Industrial Average fell 0.8%
  • The MSCI World index fell 0.8%


  • The Bloomberg Dollar Spot Index was little changed
  • The euro was little changed at $1.0871
  • The British pound rose 0.1% to $1.2745
  • The Japanese yen rose 0.4% to 145.77 per dollar


  • Bitcoin fell 3.7% to $27,872.76
  • Ether fell 3.9% to $1,736.64


  • The yield on 10-year Treasuries advanced four basis points to 4.29%
  • Germany’s 10-year yield advanced six basis points to 2.71%
  • Britain’s 10-year yield advanced 10 basis points to 4.75%


  • West Texas Intermediate crude rose 0.9% to $80.06 a barrel
  • Gold futures fell 0.5% to $1,919.30 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Alex Nicholson, Richard Henderson and Alice Gledhill.

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