Wall St sells off, led by growth shares

·2-min read

US stocks have ended sharply lower, led by declines in mega-cap growth shares as the benchmark 10-year yield hit fresh three and a half year highs and investors grew more concerned about the interest rate outlook.

The S&P 500 fell below 4,000, with Apple shares the biggest weight on the index as well as on the Nasdaq.

Benchmark 10-year US Treasury yields hit their highest levels since November 2018 early in the session.

Investors are worried about how aggressive the Federal Reserve will need to be to tame inflation.

The US central bank last week hiked interest rates by 50 basis points.

"Markets are digesting the start of a return to a more normal monetary policy environment," said Kristina Hooper, chief global market strategist at Invesco in New York.

"Moving more aggressively (on rates) raises the spectre of a recession, especially with all of these complications - high inflation, Russia's invasion of Ukraine, COVID-related supply chain disruptions," she said.

Investors have also been worried about an economic slowdown in China following a recent rise in coronavirus cases.

The S&P 500 lost 132.79 points, or 3.22 per cent, to end at 3,990.55 points while the Nasdaq Composite lost 514.91 points, or 4.24 per cent, to 11,629.75 and the Dow Jones Industrial Average fell 649.52 points, or 1.97 per cent, to 32,249.85.

Among the hardest hit in the recent sell-off have been technology and growth stocks, whose valuations rely more heavily on future cash flows.

The energy sector sector also tumbled as oil prices dropped.

Twitter Inc shares fell as Hindenburg Research took a short position on the social media company's stock, saying the company's $US44 billon ($A63 billon) deal to sell itself to Elon Musk has a significant risk of getting repriced lower.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting