Microsoft Corp, Apple Inc and Amazon.com Inc dropped more than 2%, weighing more than any other stocks on the S&P 500.
The Dow Jones Industrial Average fell 0.39% to end at 31,270.09 points, while the S&P 500 lost 1.31% to 3,819.72.The Nasdaq Composite dropped 2.7% to 12,997.75. That left it at its lowest since early January and reduced its gain in 2021 to less than 1%. Another report showed U.S. services industry activity unexpectedly slowed in February amid winter storms, while a measure of prices paid by companies for inputs surged to the highest level in nearly 12-1/2 years.
Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high interest rates hurt the value of future earnings more than the value of earnings made in the short term. Exxon Mobil Corp rose 0.8% after the oil major unveiled plans to grow dividends and curb spending with projections that were less bold than previous years.