Graphic: Rising US bond yields bring back Wall Street's sinking feeling

Wall Street slumps as investors dump tech stocks

The losses were widespread, and stocks that have been the biggest winners on the market the last few years, including technology companies and retailers, suffered steep declines.

Facebook fell 4.1 percent while Netflix and Google parent Alphabet were down 8.4 percent and 5.1 percent, respectively.

The Dow Jones Index was down 832 points, while the Nasdaq declined 4.1 percent, its worst session in two years.

USA 10-year Treasuries, a closely-watched indicator of bond yields, hit a seven year high of 3.26pc on Wednesday.

The Dow Jones industrial average gave up 738 points, or 2.8 per cent, to 25,686. The Russell 2000 index of smaller-company stocks shed 46.45 points, or 2.9 per cent, to 1,575.41. The Nasdaq Composite closed at 7,422.05 for a loss of -315.97 points or -4.08%. But eventually the high rates worry stock investors, as higher rates tend to increase borrowing costs and cut into profit margins.

The moves come as positive economic data - including the unemployment rate standing at 3.7 percent, its lowest level since 1969 - stoked investor fears that the Federal Reserve would raise rates aggressively to prevent the economy from overheating.

Bear markets since 1975 have had far lower percentage drops at their bottom, even as markets have grown remarkably in inflation-adjusted dollars. In 1987, stocks dropped more than 20 percent on a single day-Black Monday, Oct. 19-after a strong rally crashed into the Persian Gulf turmoil and trade deficits.

"If the Feds are insane, this market reaction is bordering on insanity, as so many negative crosscurrents collide that is merely impossible to find a glint of optimism", he added.

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Trump says Federal Reserve ‘has gone crazy’ after big stock drop
Trump said earlier this week that he thought the central bank was moving too quickly with a series of planned interest rate hikes. At market close Wednesday, the Dow Jones average was still up more than 5,000 points since President Trump took office.

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President Trump, who's been quick to tout recent record highs in the market as a result of his economic and foreign policy, took this opportunity to criticize the Fed, calling the central bank "loco" for increasing rates.

Benchmark U.S. crude oil fell 2.4 per cent to $73.17 a barrel in NY.

United States gold futures settled up $1.9, or 0.16 percent, at $1,193.4. Copper fell 0.9 per cent to $2.78 a pound.

Japan's Nikkei 225 added 0.2 per cent, South Korea's Kospi dropped 1.1 per cent and the Hang Seng in Hong Kong gained 0.1 per cent.

The CAC 40 in France dropped 2.1 per cent, Germany's DAX lost 2.2 per cent and the FTSE 100 in London fell 1.3 per cent. Before that, Bitcoin was showing stability in value as per the general crypto volatility standards around the same time stock market indexes were trending sideways.

Some analysts have blamed rising interest rates for the selloff. Brazil's Bovespa lost 2.5 percent and the Merval in Argentina sank 2.2 percent.

The Japanese yen strengthened 0.01 per cent versus the greenback at 112.29.

The euro and sterling rose, underpinned by optimism for a Brexit deal, while the USA dollar lost ground against a basket of currencies even as US yields hovered near multiyear peaks.

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