A late burst of buying erased much of an early slide on Wall Street Tuesday. The tech-heavy Nasdaq lost 0.5%, having clawed back most of an early drop of as much as 3.9%. Facebook, Disney, Netflix, and other communications stocks helped drive the comeback. Early drops in Big Tech companies like Apple, Amazon, and Microsoft moderated as the day went on, the AP reports. Tesla, which joined the S&P 500 at the end of last year, ended down 2.2% after being down as much as 13.4%. Bond yields held near their highest level in a year. The S&P 500 rose 4.87 points, or 0.1%, to 3,881.367. The Dow Jones Industrial Average rose 15.66 points, or less than 0.1%, to 31,537.35. The Nasdaq fell 67.85 points to 13,465.20.
Investors remain increasingly focused on a big tick up in bond yields and how it affects stock valuations. The yield on the 10-year Treasury note rose to 1.36%, continuing its quick climb up over the last few weeks. When bond yields rise, stock prices tend to be negatively impacted because investors turn an increasingly larger portion of their money toward the higher, steadier stream of income that bonds provide. "If you have a 10-year (Treasury yield) which returns something, then all of a sudden you get this situation where investors may want more of a risk-free asset and rotate out of equities," said Sylvia Jablonski, chief investment officer at Defiance ETFs. While eventually bond yields impact big dividend-paying stocks like consumer staples, utilities, and real estate, it does tend to impact stocks that have big valuations like technology stocks much earlier. (After the Tesla drop, Elon Musk is no longer the world's richest man.)