NEW YORK — U.S. stock indexes dropped sharply Wednesday, and the S&P 500 was on pace for its worst day since April, as interest rates resumed their climb.
Treasury yields have jumped over the last week, which has weighed on stocks around the world, and the 10-year yield resumed its climb Wednesday to once again approach its highest level in seven years.
The rise in rates is weighing particularly heavily on areas of the market that had earlier been the biggest winners, and technology stocks had some of the morning’s steepest losses.
KEEPING SCORE: The S&P 500 was down 40 points, or 1.4 percent, at 2,840 as of 11:30 a.m. Eastern time. It’s on pace for its fifth straight decline and is close to its lowest level in two months.
The Dow Jones industrial average lost 386, or 1.5 percent, to 26,043, and the Nasdaq composite dropped 167, or 2.2 percent, to 7,570.
WINNERS AREN’T WINNING: Tech stocks and companies that sell non-essentials to consumers have been some of the top performers over the last year, nearly doubling the performance of the S&P 500. They’ve also dropped more than the rest of the market so far this month.
Tech stocks in the S&P 500 fell 2.7 percent Wednesday for the steepest loss among the 11 sectors that make up the index. Companies that sell non-essentials to consumers dropped 1.9 percent.
YIELDS: The biggest driver for the market over the last week has been interest rates, which began spurting higher following several encouraging reports on the economy. Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.
The 10-year Treasury yield rose to 3.21 percent from 3.20 percent late Tuesday after earlier touching 3.24 percent. It was at just 3.05 percent