Sept. 28 (UPI) -- The Nasdaq Composite recorded its worst day since May after tech stocks tanked Tuesday amid rising treasury yields.
The tech-heavy Nasdaq fell 2.83% and the S&P 500 dropped 2.04% as both indexes fell for the second consecutive day to start the week. The Dow Jones Industrial Average erased modest gains from Monday, declining 569.38 points, or 1.63%.
Google's parent company, Alphabet, saw shares fall 3.72%, while Facebook declined 3.66% and Amazon slid 2.64%.
Tech shares fell as a rapid rise in yield rates made their future cash flow decline in value.
The 10-year treasury yield rose as high as 1.558%, its highest level since June. It was as low as 1.29% last week and as low as 1.13% in August.
"The market's been steadily coming around to the reality that yields were awfully low relative to the fundamentals," Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, said. "Now the Fed is shifting, and everybody's shifting their positions, all at once, as we tend to do."
Federal Reserve Chairman Jerome Powell on Tuesday also told the Senate Banking Committee that supply chain issues and pressures related to reopening could lead inflation to persist for longer than expected.
"These effects have been larger and longer lasting than anticipated, but they will abate, and as they do, inflation is expected to drop back toward our longer-run 2% goal," Powell said.
Oil prices continued to climb with West Texas Intermediate crude oil futures on pace to rise for six consecutive sessions.
Stocks tied to economic reopening gained on Tuesday, as shares of Ford rose 1.06% as the company announced plans to build new production facilities in the United States.