By Yasin Ebrahim

Investing.com — The S&P 500 slumped Monday, paced by a tech-led slump as surging U.S. Treasury yields kept the pressure on growth sectors of the market including tech.

It fell 1.1%.

The three week winning streak in Technology stocks ended last week. However, technology stocks started the week weaker as Treasury yields continued their gains on concerns of Federal Reserve tightening at a faster pace next month.

“U.S. bond yields are on the rise as investors continue to digest the Fed’s more hawkish position. As a result, the 10-year yield has pushed from 2.40% to 2.74% in the past week,” Stifel said in a note.

The Fed’s plan to curb inflation will come under added scrutiny on Tuesday as the U.S. is expected report that the pace of inflation in March rose at annual rate of 8.4%, a four-decade high.

Microsoft (NASDAQ:) was the leader in the fall of big tech. UBS had estimated that Office 365 (the tech giant’s second biggest business), will see declining growth due to the reduced support from the pandemic, and the rise from work at home trends.

Facebook (NASDAQ :), Apple (NASDAQ :), and Alphabet [NASDAQ :] were all down over 2%

Twitter (NYSE) meanwhile swung the trend lower following Elon Musk’s decision to join Tesla’s board. This allowed Musk to purchase more shares of Twitter. Musk’s ownership of less than 14.9% would be limited by his decision to join the Twitter board.  

The broader tech sector was also affected by semiconductor stocks. Sentiment on chipmakers was hit after Baird downgraded Nvidia’s (NASDAQ:), to neutral from underperform, and cut its price target for the stock from $360 to $225. This sent its shares lower than 5%.

Baird flagged order cancellations for Nvidia’s consumer GPUs, and said the upcoming fork for cryptocurrency Ethereum could further dent demand.

The banks and financials outperformed the wider market by 0.2%. This was due to rising yields before the beginning of the quarterly earnings season.

JPMorgan (NYSE 🙂 releases results Wednesday. Citigroup (NYSE:), Wells Fargo (NYSE:),Goldman Sachs(NYSE:), Morgan Stanley Report from (NYSE:), Thursday

The market was also affected by energy stocks, even though oil prices were under pressure due to concerns over the effect of China lockdowns on Chinese demand.

Amongst the largest decliners of the sector were Occidental Petroleum, Diamondback Energy (NASDAQ;), and ConocoPhillips.  

Also, Sony (NYSE) detailed plans to make an additional $1 Billion investment in Epic Games. This deal will further strengthen its relationship with Epic Games.