Tech stocks slammed as bond yields surge to 14-month high

J.P. Morgan, Goldman Sachs outperformed as yield curve steepened

Technology and other growth stocks were pummeled Thursday as bond yields climbed to their highest level in 14 months.

The Nasdaq Composite index plunged 3.02% while the S&P 500 lost 1.48%. A 0.46% decline in the Dow Jones Industrial Average pushed the index back below the 33,000 level.

Ticker Security Last Change Change %
I:COMP n.a. n.a. n.a. n.a.
SP500 S&P 500 4185.47 +15.05 +0.36%
I:DJI DOW JONES AVERAGES 34200.67 +164.68 +0.48%

The selloff in the stock market occurred as the 10-year yield spiked 8.9 basis points to 1.73%, closing at its highest level since January 2020, a day after the Federal Reserve lifted its growth and inflation forecasts for the current year and pledged to use all of the tools at its disposal, if necessary, to support the economy.

FED HOLDS RATES NEAR ZERO, BUT LIFTS GROWTH OUTLOOK AS US ECONOMIC RECOVERY STRENGTHENS

In stocks, the sharp rise in bond yields weighed on technology shares with Tesla Inc., Apple Inc. and Microsoft Corp. all underperforming.

Ticker Security Last Change Change %
QQQ INVESCO QQQ NASDAQ 100 342.01 +0.40 +0.12%
AAPL APPLE, INC. 134.16 -0.34 -0.25%
MSFT MICROSOFT CORP. 260.74 +1.24 +0.48%

Dow components Goldman Sachs Group Inc. and JPMorgan Chase & Co. outperformed as the selloff in the U.S. Treasury market caused the yield curve to steepen.

Ticker Security Last Change Change %
GS THE GOLDMAN SACHS GROUP, INC. 342.61 +4.03 +1.19%
JPM JPMORGAN CHASE & CO. 153.30 +1.14 +0.75%

In deal news, The Hartford, with a market cap of $23 billion, confirms it has received an "unsolicited, non-binding" proposal from larger rival Chubb which carries a $75 billion market value.

HARTFORD GETS OFFER FROM CHUBB, UNSOLICITED

Ticker Security Last Change Change %
HIG THE HARTFORD FINANCIAL SERVICES GROUP INC. 66.35 -0.50 -0.75%
CB CHUBB LIMITED 162.61 +0.44 +0.27%

Elsewhere, II-VI Inc. raised its takeover bid for Coherent Inc. to $7 billion, trumping an offer made a day prior by Lumentum Holdings. The new offer would pay Coherent shareholders $220 in cash and 0.91 II-VI shares for each share they own.

Ticker Security Last Change Change %
COHR COHERENT 268.04 +0.44 +0.16%
NKLA NIKOLA CORP. 10.98 +0.35 +3.29%

And Nikola Motor Corp. said South Korean partner Hanwha Corp. has decided to halve its 5.65% stake in the electric truck maker. The two companies will maintain their strategic partnership.

In earnings, Dollar General Corp. warned same-store sales would be flat to lower from a year ago due to difficult comparisons. Quarterly results were mixed with earnings missing Wall Street estimates and revenue outpacing forecasts. Williams-Sonoma, however, hiked its dividend by 17% and announced a $1 billion buyback.

Ticker Security Last Change Change %
DG DOLLAR GENERAL 216.74 +0.99 +0.46%
WSM WILLIAMS-SONOMA 174.31 +2.23 +1.30%

In commodities, West Texas Intermediate crude oil slid $4.60 to $60 a barrel while gold inched up $5.40 to $1,732.20 an ounce.

Overseas markets were higher across the board.

Germany’s DAX 30 outperformed in Europe, trading up 1.23%, while France’s CAC 40 and Britain’s FTSE 100 added 0.13% and 0.25%, respectively.

In Asia, China’s Shanghai Composite index ticked up 0.51%, Japan’s Nikkei rallied 1.01% and Hong Kong’s Hang Seng index climbed 1.28%.