Major U.S. stock indexes slumped Thursday, as technology shares tumbled anew.
Losses accelerated in afternoon trading, sending the Dow Jones Industrial Average down more than 250 points before the index pared losses toward the end of the session.
Many investors said they see few reasons to extend bets on stocks that are already trading near all-time highs. Recent economic data, especially inflation, have been middling, expectations for policy changes like tax cuts and fiscal stimulus have been tempered and second-quarter earnings season has yet to begin in earnest.
Central banks around the world have also suggested that they will push for a normalization in monetary policy -- sending yields on government bonds higher.
"There's a lot of complacency out there," said Tom Stringfellow, president of Frost Investment Advisors. With stocks already trading near where many analysts expect them to finish the year, further pullbacks wouldn't be surprising, he added.
At the same time, selloffs have been relatively short-lived, suggesting investors don't want to miss out on a market that has been rising. The Dow Jones Industrial Average is on track to rise for seven straight quarters.
The blue-chip index fell 167.58 points, or 0.8%, to 21287.03 on Thursday and the S&P 500 lost 20.99 points, or 0.9%, to 2419.70 -- their largest one-day declines in more than a month. The Nasdaq Composite fell 90.06 points, or 1.4%, to 6144.35.
As stocks swung, the CBOE Volatility Index jumped 14% to 11.44. The VIX, which measures investors' expectations for swings in the S&P 500 over the next 30 days, typically moves inversely to stocks.
Tech shares led declines in the S&P 500, falling 1.8%. Google parent Alphabet fell $23.19, or 2.4%, to $937.82 and chip maker Nvidia shed 5.07, or 3.3%, to 146.68. The S&P 500 tech sector is up 17% this year, but has fallen 2.6% in June as some investors have questioned whether the group's run-up has been overdone.
Financial shares climbed, benefiting from a recent rise in Treasury yields, as well as the Federal Reserve's decision Wednesday to allow big U.S. banks to ramp up dividend payouts and share buybacks.
The KBW Nasdaq Bank Index of U.S. commercial lenders added 1.3%.
Elsewhere, expectations of higher interest rates in Europe and the U.K. bolstered the euro and the pound, which were both up roughly 0.6% against the U.S. dollar.
The Stoxx Europe 600 fell 1.3%, with broad losses across sectors offsetting gains in bank shares.
A raft of statements Wednesday by policy makers at the European Central Bank, the Bank of England and the Bank of Canada has convinced many investors that the gradual end of monetary stimulus is coming.
The key test is whether economic data and corporate profits come in strong enough to justify borrowing costs going up, analysts said. While optimism from central bankers can give stocks a boost, higher rates can also make them look less attractive.
"What's surprising is that equities continue to take it so well," said Philippe Gijsels, chief strategy officer at BNP Paribas Fortis. "Markets have benefited enormously from the very loose monetary policy. It would be logical to assume that if this stops you'll have an impact on markets."
Earlier, Japan's Nikkei Stock Average edged up 0.4%, while Hong Kong's Hang Seng and Australia's S&P/ASX 200 added 1.1% each.
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(END) Dow Jones Newswires
June 29, 2017 18:04 ET (22:04 GMT)