Nasdaq tanks 2.8% in worst day since March as yield spike hits tech stocks

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Nasdaq tanks 2.8% in worst day since March as yield spike hits tech stocks, Dow drops 570 points

U.S. stocks fell sharply on Tuesday, with tech names dragging down the broader markets as Treasury yields traded near three-month highs and lawmakers in Washington continued their budget stalemate.

The Nasdaq Composite dropped 2.83% to 14,546.68 for its worst day since March and the S&P 500 shed 2.04% to finish at 4,352.63. The Dow Jones Industrial Average lost 569.38 points, or 1.63%, to close at 34,299.99.

The 10-year Treasury yield continued its speedy climb on Tuesday, rising as high as 1.567% as investors bet the Fed would carry through on its promise to curb its emergency bond-buying stimulus as inflation jumps. The 10-year yield, which traded as low as 1.13% as recently as August, has reversed dramatically to the highest levels since June after the Fed signaled last week it would taper its $120 billion in monthly bond purchases “soon.”

“The market’s been steadily coming around to the reality that yields were awfully low relative to the fundamentals. Now the Fed is shifting, and everybody’s shifting their positions, all at once, as we tend to do,” said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research.

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