Stocks Close Sharply Lower as Bond Yields Hover Near Three-Month High

I hope my retirement accounts aren't taking a hit, yikes!

At WSJ, "Tech shares pull S&P 500, Nasdaq down more than 2%, while bond yields rally on inflation concerns":

U.S. stocks tumbled Tuesday, logging their sharpest pullback since May, as rising bond yields deepened a rout in shares of technology companies.

For much of the past decade, many investors had piled into shares of fast-growing technology companies, wagering they would deliver relatively robust profit growth even in a sluggish economic environment. This week, that trade hit a roadblock.

With the economy out of the worst of the pandemic-fueled crisis, the Federal Reserve signaled last week that it could start to reverse its pandemic stimulus programs as soon as November and raise interest rates sometime next year. That appears to have prompted an unwind of some of the market’s most enduring trades—pushing Treasury yields to their highest level in months and sending investors out of popular technology stocks.

Investors agree the economic outlook has improved significantly since 2020. But many wonder how well the market will be able to stand on its own once the Fed begins to taper its monthly asset purchases—especially since they credit much of the market’s rebound from its pandemic low to extraordinary levels of monetary and fiscal support from Washington. Some investors have also expressed concerns about the economic outlook. Inflation has made a surprising comeback this year, something some worry will start to cut into companies’ profit margins. The fast-spreading Delta variant of Covid-19 has also complicated economists’ efforts to forecast the global economy’s growth outlook.

“People are realizing, or at least remembering, that central banks are going to have to start raising rates,” said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe. “The patient has become used to being given all these drugs, but soon those drugs are going to have to be reduced.”

The S&P 500 fell 90.48 points, or 2%, to 4352.63, marking its second straight day of losses and worst one-day percentage decline since May. The tech-heavy Nasdaq Composite Index slid 423.29 points, or 2.8%, to 14546.68, while the Dow Jones Industrial Average shed 569.38 points, or 1.6%, to 34299.99.

All three major indexes are on course to end the month lower.

Tuesday’s market selloff was broad, pulling all but one of the S&P 500’s sectors down for the day.

Traders yanked money out of the technology sector. Shares of companies like Facebook, Google parent Alphabet and Microsoft, each of which had vastly outperformed the broader market this year, fell more than 3.5% apiece.

Meanwhile, selling pressure accelerated in the government bond market. The yield on the benchmark 10-year Treasury note rose for a sixth consecutive day Tuesday, climbing from 1.482% Monday to 1.534%, its highest level since late June. Bond yields rise as prices fall.

Shares of energy companies avoided the broader selloff...