Nasdaq 100 slides 1% as tech rout deepens on rate worries

The Nasdaq 100 slid 1% in intraday trading Tuesday, reversing earlier gains as rising Treasury yields and rate-hike expectations triggered a selloff in growth stocks.

"The market is repricing growth stocks as the 10-year yield holds above 4.4% and the Fed's next move remains a hike, not a cut," said Kathleen Brooks, research director at XTB.

The S&P 500 edged 0.3% lower to 7,533 while the Dow Jones Industrial Average bucked the trend, rising 0.8% to 52,058. The divergence underscored a rotation out of technology into value and cyclical names. Semiconductors led the selloff, with Advanced Micro Devices falling 4.8%, Marvell Technology dropping 4.5% and Nvidia declining 1.7%. The CBOE Volatility Index held at 15.98, reflecting elevated but not panic-level anxiety.

The move comes ahead of the Federal Reserve's policy decision Wednesday, where the central bank is expected to hold rates steady even after May headline CPI climbed to 4.2% year over year. Market pricing via CME's FedWatch shows a majority of traders expect a rate hike by December, a backdrop that has pressured high-valuation tech names throughout June.

The selloff in tech coincided with a sharp decline in oil prices, with West Texas Intermediate crude falling 4.6% to $77 a barrel on optimism over the reopening of the Strait of Hormuz. The U.S. 10-year Treasury yield edged lower to 4.44% after touching multi-month highs last week, while the U.S. Dollar Index held near 99.3.

Among individual movers, SpaceX shares jumped nearly 10% to extend gains following its recent IPO, while Oracle slipped 1.4% ahead of its earnings report. Tesla fell 1.5%, adding to a weekly decline of more than 5%.

The broader market showed mixed breadth. Housing-related stocks outperformed after stronger-than-expected existing home sales data, with Toll Brothers gaining 5.1% and Floor & Decor rising 8.3%. On the losing side, crypto-exposed stocks tracked Bitcoin lower, with MicroStrategy dropping 8% and Coinbase falling 4.1%.

This article is for informational purposes only and does not constitute investment advice.