New York (AFP)

The New York Stock Exchange ended sharply lower on Thursday, as tech stocks fell sharply as bond rates rose to their 14-month high, despite the accommodating speech of the US Central Bank (Fed).

According to final results, the Nasdaq, which concentrates technology stocks sensitive to fears of inflation and tightening financial conditions, plunged 3.02% to 13,116.17 points.

The index of flagship stocks Dow Jones dropped 0.46% to 32,862.30 points and the S&P 500 dropped 1.48% to 3,915.46 points.

Bond yields on 10-year Treasury bills, which influence corporate and real estate lending, climbed to 1.71%, a peak since January 2020, after hitting more than 1.74% in the session.

30-year yields also accelerated to 2.45%, their highest level in 19 months.

On Wednesday, the market seemed to have been reassured by the position of the Fed, the Dow Jones and the S&P 500 touching new records.

The central bank had once again assured that it was maintaining its monetary policy at overnight rates close to zero to support the economy.

But at the same time, the Fed has sharply raised its forecast for US GDP growth to 6.5% for 2021 with inflation that will temporarily point, it says, to 2.4%.

"The market has thought twice about these rising inflationary pressures: it first affected the technology sector with the Nasdaq, then all sectors of the market," noted Quincy Krosby of Prudential.

A very successful indicator for March, that of manufacturing activity in Philadelphia, caught the eye of investors.

Rising to 51.8 points in March from 23.1 points in February, it has accelerated dramatically and reached its highest level in 50 years.

“It was really a major surprise on the upside and most importantly, it showed that production costs were rising rapidly,” Ms. Krosby said.

"The market is worried about whether this is really temporary."

"There are fears that the Fed may lose control of the yield curve and it is information technology stocks and growth-oriented stocks that are under the selling pressure," Schwab added. .

For investors, these technology groups are sensitive to rising interest rates and inflation because it erodes their future profits and increases their investment needs.

Tesla lost almost 10%;

Amazon, Apple and Netflix have all dropped more than 3%.

"The increase in yields certainly reflects a stronger economy, a successful vaccination campaign," said the expert from Prudential.

"But the question remains: will the Fed have to begin a transition to a tightening of its monetary policy perhaps in September-October? Not by raising interest rates but by probably first mentioning a reduction of its purchases of treasury bills, ”asked Ms. Krosby.

Apart from the banking sector which benefited from the rate hike, all sectors of the S&P 500 were in loss, with energy in the red light (-4.68%) as crude oil prices fell 7% .

Lordstown, which develops an electric pickup, plunged 13.78% after it said it was under SEC investigation following a report by investment firm Hinderburg accusing it of present misleading information about its activities.

© 2021 AFP