Energy, tech pull down Wall Street

Stocks closed lower Thursday, as higher bond yields once again pulled down shares of technology companies and the energy sector sold off on a drop in oil prices.

The tech-heavy Nasdaq suffered its second-worst loss of the year, falling 3%.

The S&P 500 index fell 1.5%. The Dow Jones Industrial Average lost 0.5%.

Bond yields moved higher again, with the yield on the 10-year Treasury note rising to 1.72%, near levels not seen since January 2020.

Big technology stocks continued to be volatile and move mostly downward, as the tick up in bond yields has made expensive technology stocks less attractive.

Bank stocks were among the best performers as investors bet that higher interest rates would translate into higher profits. Industrial stocks also made solid gains.

The market touched new highs a day earlier after the Fed said U.S. economic growth should rebound to 6.5% this year — the strongest since the 1980s — and inflation will climb above 2% for the first time in years.

“Early in a cycle you’re going to see higher inflation and higher interest rates and demand as global activity picks up,” said Scott Wren, senior global market strategist at Wells Fargo Investment Institute.

Investors have worried that if inflation picks up, central banks might raise interest rates, which would cool economic growth. But Fed Chairman Jerome Powell’s comments at a news conference appeared to reassure them. Fed officials have said they would let the U.S. economy “run hot” to make sure a recovery is gaining traction.