The benchmark S&P index has fallen for four straight days, with the index now down more than 20 per cent from its most recent record closing high to confirm a bear market began on Jan 3, according to a commonly used definition.
High-growth market heavyweights such as Apple, Microsoft and Amazon were the biggest drags on the S&P 500, as the yield on the benchmark 10-year US Treasury note hit 3.44 per cent, its highest level since April 2011. Growth stocks are more likely to see their earnings suffer in a rising rate environment.
"The market had been trying to rally around the idea that inflation has peaked, and the Fed would not have to be more aggressive," said Mr Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. In addition, the two-year 10-year US Treasury yield curve briefly inverted for the first time since April, which many in the markets see as a reliable signal that a recession could come in the next year or two.