“How did you go bankrupt?”
Two ways. Gradually, then suddenly.”
The Dow dropped more than 800 points in one of the worst sell-offs since February as investors worried that sharply rising interest rates would constrain the nation’s historic economic expansion.
Higher rates tend to moderate economic growth and make borrowing more expensive for the U.S. government as well as businesses and consumers. The 10-year U.S. Treasury yield, a key benchmark for rates, has been spiking and is now at 3.2 percent, one of its highest levels since just after the Great Recession. Rates on many types of loans, such as those for mortgages and cars, tend to be tied to the government bond.
Traders rushed out of stocks that have been driving the economy, namely big tech. Netflix was down more than 8 percent, Amazon was off 6 percent, and Apple and Google were both down more than 4.5 percent. Meanwhile, safe bets such as utilities and consumer staples were the only positive notes in the sell-off.