In further evidence that stocks can rally despite rising Treasury yields, LPL Research found that in all 12 periods of rising 10-year yields since 1996, the S&P 500 ended the period higher than it began, according to senior market strategist Ryan Detrick.
The losses were widespread, and stocks that have been the biggest winners on the market the last few years, including technology companies and retailers, suffered steep declines.
That all played into a market that is increasingly anxious about global growth after warnings from the International Monetary Fund this week and a rise in Treasury yields to a more than 7-year high above 3 percent that signals a tightening of available capital globally.
Although that's largely because the U.S. economy is so strong, the spike in rates for the benchmark USA 10-Year Treasury has investors wondering if the near-decade-old bull market may finally be ending.
Major equity indexes in Europe fell more than 1.0 percent, also pulled down by technology shares, and gold prices inched up as some investors sought refuge in the metal. The Dow Jones Industrial Average fell 831 points, its worst loss in eight months. Technology companies were among the losers, with the Nasdaq Composite dropping more than 2% to 7,575.34.
Wall Street stocks plunged Wednesday, with major indices losing more than three percent in a selloff prompted by the sudden jump in United States interest rates.
Shares in Facebook, Amazon, Apple, Netflix and Google's parent company Alphabet - the so-called "FAANG" stocks that have driven U.S. markets to all-time highs recently - all fell in NY trading. The Russell 2000 index of smaller-company stocks shed 46.45 points, or 2.9 percent, to 1,575.41.
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All 30 Dow stocks were in the red, sending the index below 26,000 points for the first time in a month.
Benchmark U.S. crude oil fell 2.4 per cent to $73.17 a barrel in NY.
Bond prices fell. The yield on the 10-year Treasury rose to 3.23 percent.
Higher bond rates can weigh on stocks as they provide more competition for yield-hungry investors. The energy sector was close behind with a 2.9 percent loss, as oil extraction in the Gulf of Mexico shutting down due to the hurricane. Chipmaker Nvidia dropped 5 percent.
The CBOE Volatility Index, Wall Street's "fear gauge", rose 2.5 points, gaining for the fifth straight session to hit its highest since June 25. Silver dipped 0.5 percent to $14.33 an ounce.
The CAC 40 in France dropped 2.1 percent, Germany's DAX lost 2.2 percent and the FTSE 100 in London fell 1.3 percent. The Nasdaq fell 177 points, or 2.3 percent, to 7,560.
There were, however, slight lifts for Japan's Nikkei, which added 0.2 per cent, and Hong Kong's Hang Seng, which gained 0.2 per cent. Brazil's Bovespa lost 2.5 per cent and the Merval in Argentina sank 2.2 per cent. The euro rose to $1.511 from $1.1496 late Tuesday, and the British pound rose to $1.3175 from $1.3146.
The dollar fell to 112.59 Japanese yen from 113.05 yen late Tuesday.