Rising interest rates could keep a choke hold on tech and growth stocks

Rising interest rates could keep a choke hold on tech and growth stocks

Rising bond yields could keep a choke hold on tech and growth stocks for now, as investors bet the Federal Reserve will raise interest rates four or more times this year. Stocks tumbled Monday, with tech among the worst performing sector as Treasury yields jumped. The Nasdaq was hard hit, slumping 2.1% while the lost about 1.7% at midday. The , which moves opposite price, was at a new post-pandemic high of 1.86% Monday, after trading at just under 1.8% Friday. The also zipped higher, crossing above 1% to 1.04%. For perspective, the 2-year, which most reflects Fed policy, was just above 0.5% at the beginning of December. "I think a lot of this is stemming just from the fact that people are starting to get even more aggressive on their Fed calls," said Jim Caron, head of macro strategies, global fixed income at Morgan Stanley Investment Management. "It was two rate hikes and then three and now it's four, and it could be more than four." Bond pros expect yields to continue to rise into the Fed's meeting Jan. 25 and 26, and then will take their cue from the Fed's tone. That could mean rough sledding for stocks.