U.S. stocks staged a significant downturn on Thursday as a wave of selling began in the technology sector, dragging Wall Street lower.
All three major U.S. stock index tumbled rapidly as the 10-year Treasury note marked its biggest one-day advance since November after soaring as high as +1.6% in a sudden move that some described as a “flash” spike.
The yield later settled back down to around 1.52%, its highest level since February 2020.
The advance reflects expectations of higher inflation and higher borrowing costs for companies and individuals.
The five-year yield, which is more sensitive to monetary policy shifts, jumped 0.21 points to 0.82%, the second-largest one day rise seen over the past decade.
Yields added to their advance this week even after Federal Reserve Chair Jerome Powell emphasized the central bank’s commitment to easy policy and downplayed the risk of inflation, saying it could take three years or more before the Fed’s goals are reached.
At the finishing bell, on the New York Stock Exchange (NYSE) the Dow Jones Industrial Average dropped -559.85 points, or -1.75%, to 31,402.01, to mark its worst day since Jan. 29.
The broad-based Standard & Poor’s 500 Index lost -96.09 points, or -2.45% to 3,829.34 on its worst day since Jan. 27.
The rich-tech Nasdaq Composite index dropped -478-54 points, or -3.52% to 13,119.43, posting its biggest sell-off since Oct. 28.
Investors rushed out of some of the year’s hottest stocks, sending shares of companies like Apple Inc., Alphabet Inc. and Netflix Inc. down more than -2% apiece, while Tesla Inc. shares fell more than -8%.
Meanwhile, investors shrugged off better-than-expected economic data out of the U.S. on Thursday.
Labor Department data released Thursday showed the number of Americans applying for unemployment benefits fell sharply last week.
First-time jobless claims totalled 730,000 for the week ended Feb. 20, versus a forecast of 828,000, while durable goods orders increased by 3.4% in January, compared to the consensus of 1.0% growth.
GameStop, the controversial meme stock whose massive, short squeeze shocked Wall Street last month, is on the rise again.
On Wednesday, their shares jumped a whopping +103%, with Thursday’s rally hit $US160 at the open before being halted after several minutes of trading and fell to around $US129 before the second halt.
The stock resumed trading and soared as high as $184.68 before tumbling late in the day.
It closed 18.56% higher at $US108.73, while AMC Entertainment Holdings Inc. initially rose before trading down -8.8%, to $8.29.