US stocks get whacked as the 10-year hits its highest level in over 7 years

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  • US equity markets were under pressure Thursday as the 10-year yield touched its highest level since the spring of 2011.
  • Selling weighed heaviest on the tech-heavy Nasdaq, which saw losses in excess of 2%.
  • Super Micro Computers crashed more than 50% after it was reported that Chinese spies implanted tiny chips in server motherboards that were purchased from the company.
  • Watch the Nasdaq trade in real time here.

US equity markets were under pressure Thursday as Treasury yields touched their highest levels in over seven years. Selling weighed heaviest on the tech-heavy Nasdaq, which saw losses in excess of 2%. The Dow Jones industrial average and the S&P 500 were both lower by more than 1.2%.

Tuesday’s weakness comes as the benchmark 10-year Treasury yield raced above 2.30% for the first time since the spring of 2011. The 10-year had rallied more than 15 basis points since Tuesday’s close after a strong private-sector payrolls reading fuelled speculation that the Federal Reserve would hike interest rates more quickly than expected. Those rate hikes would make it more expensive for companies to borrow money, and potentially choke off economic growth sooner than anticipated.

Heavy selling battered the technology sector, where Super Micro Computer crashed more than 50% after it was reported that Chinese spies implanted tiny chips in server motherboards that were purchased from the company by firms including Amazon and Apple. Their stocks fell more than 1%.

Elsewhere in the space, Snap plunged below $US8 a share for the first time after Evercore analyst Anthony DiClemente warned that Instagram is “irreversibly reducing” the company’s ability to meet investors’ long-term expectations.

Netflix and Tesla lost 4% and 5% respectively.

Meanwhile, there was some positive news on the earnings front. Constellation Brands, the beverage maker behind Corona beer and Svedka vodka, said its booming beer business helped fuel its strong results. The company also noted that it had made more than $US1 billion on its investment in the Canadian cannabis producer Canopy Growth.

Thursday’s sharp sell-off means there will be more at stake Friday morning, when the Bureau of Labour Statistics releases its September jobs report. Analysts surveyed by Bloomberg are anticipating the US economy added 185,000 nonfarm jobs as the unemployment rate slipped to 3.8%.

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