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.
Smaller tech companies were not spared in the financial carnage. Mobile payments player Square (sq) lost 10%, restaurant reviewer Yelp (yelp) was off 7%, and recently public e-seller Stitch Fix lost 6%.
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.