• The S&P 500 opened down 0.7%, with the Nasdaq declining 1.2%, as investors rotated out of high-growth tech stocks amid rising bond yields.
  • The sell-off was broad-based but tech-heavy, with megacap names like Apple and Microsoft falling more than 1% in early trading.
  • Market participants are eyeing upcoming economic data and Fed commentary for direction, with some analysts viewing the dip as a buying opportunity.

Risk-Off Mood Grips Markets

U.S. stocks opened lower on Thursday, with the S&P 500 falling 0.7% and the Nasdaq dropping 1.2%, as a surge in bond yields weighed on tech and growth stocks. The yield on the 10-year Treasury note rose to 4.53%, its highest in two weeks, pressuring high-multiple equities. “Investors are recalibrating expectations for rate cuts after stronger-than-expected economic data,” said a senior market strategist at a major bank, speaking on condition of anonymity. The Dow Jones Industrial Average also slipped, down 0.4% in early trade.

Tech Leads the Decline

Tech and growth sectors bore the brunt of the selling, with the S&P 500 information technology index falling 1.4%. Apple Inc., Microsoft Corp., and Nvidia Corp. each lost over 1% in early trading, contributing to the Nasdaq’s underperformance. “The market is taking profits after a strong rally in tech—this is a natural pause,” said a portfolio manager at a New York-based asset manager. Meanwhile, the broader market saw mixed movements, with the energy sector edging up as oil prices steadied.

Macro Data and Fed in Focus

Investors are awaiting the release of initial jobless claims and manufacturing data later today, which could provide additional clues on the economy’s health. The Federal Reserve’s recent minutes showed officials were in no rush to cut rates, a stance that has kept bond yields elevated. “Higher for longer is the theme, and that’s hitting growth stocks hardest,” commented a strategist at a global investment firm. The Cboe Volatility Index, or VIX, rose 8% to 16.5, signaling increased anxiety.

Outlook and Analyst Views

Despite the downbeat open, some analysts see the pullback as short-lived. “This is a classic intraday dip—we may see a recovery by the close if data comes in as expected,” said a market analyst at a European bank. Others caution that further downside could occur if earnings disappoint or if the Fed signals a more aggressive stance. “It’s too early to call a reversal; we need to watch for support levels in the S&P 500 around 5,200,” added the analyst.

Correction: An earlier version of this article incorrectly stated the Nasdaq’s decline as 1.5%. The correct figure is 1.2%.