(Bloomberg) — Wall Street’s biggest technology companies are down more than $200 billion in market value in early trading as rising bond yields prompted investors to rotate out of pricey growth stocks.
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All members in the $9 trillion-plus NYFANG+ index, which includes 10 highly liquid tech and internet stocks, were in the red. Nvidia, Apple and Amazon all fell at least 1.5% intraday.
Tech stocks are particularly sensitive to rising rate expectations because their value rests heavily on future earnings, which are discounted more deeply when rates rise. Bond yields from the U.S. to Germany spiked, as investors braced for the Federal Reserve to start tapering.
“It is the speed of the move higher in bond yields since last Thursday which appears to have caught the market by surprise,” said Neil Campling, head of TMT research at Mirabaud Securities in London. “It’s no surprise that the NASDAQ is underperforming the other indices this morning.”
U.S. 10-year Treasury yields spiked to as much as 1.55% on Tuesday. In March, when those yields hit 1.74%, the tech-heavy Nasdaq 100 Index was trading at about 13,100, well below current levels of close to 15,000.
(Updates loss in valuation in headline and first paragraph.)
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