The S&P 500 index fell to its lowest since April 2021 on Monday as higher U.S. Treasury yields hit growth stocks amid prospects of aggressive policy tightening, while investors grappled with fears of a sharp economic slowdown in China.

All of the 11 major S&P sectors declined. The energy sector tumbled 6% on the back of a 2% drop in oil prices, as weak China data and a tighter COVID-19 lockdown in Shanghai deepened fears of a potential global slowdown. [GLOB/MKTS]

The tech-heavy Nasdaq dropped 3.1% to its lowest level since Nov 2020 as megacap stocks Microsoft Corp, Amazon.com, Apple Inc, Google-owner Alphabet Inc, Meta Platforms and Tesla Inc fell between 1.6% and 6.2%.

Chipmakers dropped 4%.

Benchmark 10-year U.S. Treasury yields were at 3.08% after hitting their highest levels since November 2018 earlier in the session as expectations of higher interest rates unnerved investors. [US/]

After a 50 basis points increase in interest rates this month by the U.S. central bank, many traders expect a hike of another 75 basis points at the June meeting. [IRPR]

“The concern here is that the Federal Reserve is going to essentially ignore market conditions and equity market volatility and continue on with rate hikes,” said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management.

At 11:52 a.m. ET, the Dow Jones Industrial Average was down 486.39 points, or 1.48%, at 32,412.98, the S&P 500 was down 93.43 points, or 2.27%, at 4,029.91, and the Nasdaq Composite was down 373.29 points, or 3.07%, at 11,771.38.

Investors will keep a close eye on U.S. inflation data for April for clues on whether price pressures are reaching a peak.

“You have to look pretty hard for positive catalysts in the current market environment,” said Brian Price, head of investment management, Commonwealth Financial Network.

“Any positive developments on the geopolitical front, or a weaker than expected CPI report later this week, could help turn the tide and see investors embrace risk assets once again.”

Technology-focused growth stocks have borne the brunt of the selloff this year as their returns and valuations are discounted more deeply when yields rise.

The S&P 500 growth index has dropped 23.4% so far this year, compared to a 15.5% fall in the benchmark index.

The first-quarter earnings season is on its final leg, with nearly 80% of the 434 S&P 500 companies that have reported results so far topping estimates, according to Refinitiv.

Twitter Inc slipped 2.2% as Hindenburg Research took a short position on the social media company’s stock, saying the company’s $44 billon deal to sell itself to Elon Musk has a significant risk of getting repriced lower.

Declining issues outnumbered advancers for a 7.03-to-1 ratio on the NYSE and for a 5.36-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 66 new lows, while the Nasdaq recorded 11 new highs and 1,030 new lows.