The trading information is seen on the electronic screen at the New York Stock Exchange in New York, the United States, Oct. 10, 2018. (Photo: Xinhua/Wang Ying)
NEW YORK, Oct. 10 (Xinhua) -- US stocks closed sharply lower on Wednesday as rising rate fears and tech share sell-off rattled the market.
The Dow Jones Industrial Average decreased 831.83 points, or 3.15 percent, to 25,598.74. The S&P 500 was down 94.66 points, or 3.29 percent, to 2,785.68. The Nasdaq Composite Index fell 315.97 points, or 4.08 percent, to 7,422.05.
The tech sector had its worst day in seven years, leading the Dow to its worst day in eight months.
Shares of Amazon declined 6.15 percent, while Netflix slid 8.38 percent. Facebook and Apple also fell more than 4 percent each.
The tech sector includes the largest companies by market cap in the United States and those that have been the biggest contributors to the extended bull market.
Fears for rising bond yields also put pressure on the stock market.
The benchmark 10-year Treasury note yield hit 3.26 percent on Tuesday, the highest level since 2011. On Wednesday, two-year Treasury yield hit 2.91 percent, its highest level in a decade.
Investors have been grappling with higher interest rates following a batch of key economic data and recent comments from top central bank officials.
The unemployment rate declined to 3.7 percent in September, and total nonfarm payroll employment increased by 134,000, according to the US labor department.
In September, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents to 27.24 US dollars. Over the year, average hourly earnings have increased by 73 cents, or 2.8 percent.
Fed Chair Jerome Powell last week said that the US central bank had a long way to go before interest rates hit neutral, indicating that more hikes could be on the horizon.
US producer prices increased 0.2 percent in September, reversing an unexpected decline in August and in line with expectations.
Final demand prices declined 0.1 percent in August and were unchanged in July. On an unadjusted basis, the final demand index advanced 2.6 percent for the 12 months ended in September, said the Labor Department on Wednesday.
August sales of merchant wholesalers were 511.1 billion US dollars, up 0.8 percent from the revised July level and were up 9.2 percent from the same period last year.
Strong data and commentary from Fed officials can be bullish for equities, but that comes with the side effect of having concerns on more inflation and interest-rate increases, which in turn is a negative for equities, experts noted.
Meanwhile, investors also brace for the upcoming earnings season, with J.P. Morgan Chase, Citigroup and Wells Fargo scheduled to report later this week.
Third quarter earnings are expected to increase 21.5 percent from the same period last year. Excluding the energy sector, the earnings growth estimate declines to 18.5 percent, according to Thomson Reuters.