Tech Sector Leads Tuesday Market Sell-Off: What You Need To Know

The stock market has been witnessing volatility since early September that is threatening to take it to its mid-August lows.

Broad-Based Sell-Off Takes Hold: After starting the week on a weak note, stocks were seen extending their losses on Tuesday, led by the tech sector. 

The tech-heavy Nasdaq Composite Index was down 2.18% at 14,643.26, underperforming the Dow Jones Industrial Average and the broader S&P 500 Index.

The latter two gauges were down 1.01% at 34,518.61 and 1.54% lower at 4,374.69, respectively.

Tuesday marks the third straight session of losses for the Nasdaq Composite Index, and the S&P 500 Index has been lower for a second straight session in running. The Dow Jones Industrial is seen snapping a four-session winning streak.

Related Link: Why Apple Is A 'Top Tech Name' To Own Right Now

Multiple Factors Work In Unison: The weakness in the market is orchestrated by a slew of negative catalysts.

• Fears of imminent interest rate hikes have pushed bond yields to their highest level since late June. The yield on the benchmark 10-year Treasury note is rising 3.841% to 1.5410.

• The rise in bond yields is attributable to recent hawkish comments by Fed officials. In prepared remarks delivered to the Senate Banking Committee, Fed Chair Jerome Powell hinted at higher inflation lasting longer than anticipated.

• The U.S. dollar is also trading at its highest level in over 10 months amid fears of removal of monetary policy accommodation. The U.S. dollar was last seen up 0.44% at 93.80.

• WTI crude oil prices, which touched a three-year high at $76.67 earlier in the day amid fears over a demand-supply imbalance, have pulled back and rea down 1.33% at $74.45. The retreat could be attributed to the dollar strength, as crude oil is dollar-denominated.

FAANGs Take A Beating: Elite tech stocks, going by the moniker FAANG, are all notably lower. Higher bond yields make the returns on stocks less attractive, triggering liquidation in the latter asset. The primary target in such an equity sell-off would be tech stocks, which boast of heady valuations.

Facebook, Inc. FB shares were down 3.93% at $339.70.
Amazon.com, Inc. AMZN was slipping 2.8% at $3,310.39.
Apple Inc. AAPL was receding 1.86% at $142.67.
Netflix, Inc. NFLX shares were moving down 0.95% at $587.01
Alphabet Inc. GOOG shares were retreating 4% at $2,716.92.

Related Link: Why Apple's Stock Sell-Off Is A Golden Buying Opportunity