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Stock market news live updates: Nasdaq drops 3%, tech stocks slide as Treasury yields jump

Emily McCormick · Reporter
8 min read

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Stocks ended sharply lower on Thursday as Treasury yields resumed their march higher, igniting another drop in technology stocks. Elsewhere, a new report showed U.S. initial unemployment claims unexpectedly rose last week despite loosening social distancing standards and improving weather.

[Click here to read what's moving markets heading into Friday, March 19]

The S&P 500 fell more than 1% to pull back from a record level, while the Nasdaq declined by 3% in its worst day in three weeks. The Dow fell by 0.5% after rising earlier in the session to a fresh record intraday high. Treasury yields extended recent gains, and the benchmark 10-year yield added another nearly 10 basis points to a more than one-year high of 1.74%.

Stocks seesawed back to losses on Thursday after reaching record highs a day earlier, with both the S&P 500 and Dow closing at record levels on Wednesday. These moves in turn came after the Federal Reserve telegraphed that rates would remain at their current near-zero levels through at least 2023, even as Federal Open Market Committee members upgraded their forecasts for economic growth and inflation over the next several years. Federal Reserve Chair Jerome Powell reiterated that the central bank would tolerate some overshooting of its inflation and employment targets as the economy makes strides in recovering, and would keep monetary policy loose until more data confirms the economy is back on track.

These comments helped to at least momentarily assuage a market that had grown increasingly nervous over a near-term tightening of monetary policy. Economic data has largely topped expectations, nearly $2 trillion in additional fiscal stimulus has been injected into the economy and the COVID-19 vaccine roll-out has accelerated in recent days, with more than 20% of the U.S. population receiving at least one dose to date. All of these factors have raised the specter that economic growth might overshoot even economists' recently raised targets and lead to a quick rise in inflation, warranting a faster pivot from central bankers.

But the Fed "left all of its policy levers on a maximally accommodative setting. This occurred even as it acknowledged both better incoming data and an improved growth outlook," JPMorgan economist Michael Feroli said in a note Wednesday. "Of note, while seven Committee participants now look for a hike by the end of ’23—up from five in December—that wasn’t enough to move the closely-watched median forecast, which still looks for unchanged policy rates for the next three years.

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