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The popular QQQ exchange-traded fund that tracks the Nasdaq-100 Index sank below a key level of support Wednesday, suggesting further losses may be in store for big tech stocks.
The Invesco QQQ Trust dropped by 2.9% to 309.30, pulled below its 50-day moving average of 320.50. Volume was heavy, with nearly 79 million shares traded, outpacing the average daily volume of 33.3 million shares.
The ETF closed at its lowest since January 6, dragged down as its biggest constituents came under pressure. Apple lost 1.8%, Microsoft fell 2.4% and Amazon declined 2.6%.
Investors appeared to ditch tech stocks in part as Treasury yields rose. The 10-year Treasury yield reached as high as 1.498%, up from Tuesday's settlement of 1.405%, as bonds fell in the wake of President Joe Biden's pledge late Tuesday that the US will have enough COVID-19 vaccine doses for every adult by May.
The lift in bond yields on the brighter coronavirus outlook signaled steeper borrowing costs for technology and other companies. The Nasdaq-100 Index fell 2.9% to 12,683.33. The Nasdaq Composite lost 2.7% to end at 12,997.75, notching its lowest closing level since January 6.
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See Also:
- Warren Buffett says bond investors face a 'bleak future' as yields remain near historic lows
- A CIO who earned up to 90% per trade during last year's crash is now warning of a potential 20% crash in the S&P 500 by the end of March as 10-year Treasury yields continue to rise
- Morgan Stanley breaks down 3 trades to play inflation as investors rotate out of safe-haven assets
