By Yasin Ebrahim

Investing.com – The Dow slumped Thursday, following a rout in technology stocks as Treasury yields climbed to multi-year highs a day after the Federal Reserve delivered its biggest interest rate hike in more than two decades.  

It fell 3% or 1,004 point, and it was 4.7% lower.

The biggest tech stocks fell due to a more-than 5% drop in Amazon (NASDAQ) and Facebook (NASDAQ) with Alphabet, Apple (NASDAQ) and Microsoft (NASDAQ) following closely as the rising Treasury yields, which are considered an enemy of tech growth, rose.

It briefly rose to 3.1%. That’s its highest point since November 2018. This came just one day after 50 basis points of Fed increase. A clear rise above 3% is likely to lead to higher rates. Rates are still low relative to the long-term average. 

The next target for the 10-year Treasury yield is 3.25%. I think that’s the next reasonable point where where you could see yields reset a little bit and see things sort of normalized,” Chief Market Strategist David Keller at StockCharts.com told Investing.com in an interview earlier this week.

Jerome Powell, Fed chairman, said Wednesday that the possibility of an additional 75 basis point rate increase was not likely, but added further 50 basis point rate increases were being considered in the future. This will keep investor bets intact on year-end Fed funds rate rates.

“[W]A third rate increase of 50bp is now possible at the July FOMC [and]Morgan Stanely stated in a note that 25bp would be added for the remainder of the year to bring the Fed funds rate at 2022’s end to 2.625%.