Stocks mixed as tech rally fizzles

A quiet Thursday in June turned turbulent as a rally in Treasury bonds snowballed, shaking up trading desks with a sudden flurry of volume, and a week-long rally in technology stocks was snuffed out.

Unsettled by currency and stock routs in Brazil and signs of distress in other emerging markets, traders flocked to Treasuries, igniting gains that at one point pushed the 10year yield down nine basis points in a matter of minutes. Some of the drop was later pared. In equities, the Nasdaq 100 Index fell 0.8 percent, the most in three weeks.

Turkey surprised analysts by tightening monetary policy Thursday for the third time in less than two months, while Brazil’s central bank sold extra foreign-exchange swap contracts for the second time this week, boosting investors’ protection again further declines in the currency. The lira surged and the real briefly pared losses after the actions.

After weeks in the doldrums, equities had managed to regain some swagger in recent days. The global expansion narrative had remained intact, Treasury yields were holding below the psychological barrier of 3 percent and U.S. technology shares — the drivers of past rallies — had been notching successive records. Investors will now be watching the G-7 meeting this week for clues on the trade outlook, as well as this month’s meetings of both the Federal Reserve and the European Central Bank to gauge the path of interest rates.

“The market also continues to be skeptical over any degree of progress made and remains at a point where it is viable to look for opportunity to take profit while it can to justify profit taking in a market that is still defined by improving fundamentals,” said John Stoltzfus, the chief investment strategist of Oppenheimer & Co.,