The Nasdaq slumped 2% on Wednesday as tech stocks extended their selloff for a second straight day on mounting concerns over aggressive actions by the Federal Reserve to fight inflation, with minutes from the central bank's March meeting on tap.
Shares of mega-cap growth companies such as Microsoft, Apple and Amazon.com tumbled between 2% and 5%, dragging down the Nasdaq and the S&P 500.
High-growth stocks, whose valuations stand to be pressured by higher bond yields, bore the brunt as the benchmark 10-year yield hit a three-year high.
Fed Governor Lael Brainard said on Tuesday she expected a combination of interest rate hikes and a rapid balance sheet runoff, sparking losses on Wall Street.
"The pre-earnings rally has now been somewhat cut short due to surging yields and a very strong dollar," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"The Fed minutes today will likely show an even more hawkish attitude by the Fed members. I think they'll point to a half-a-percent rise next month."
The Federal Open Market Committee's minutes, set to be released at 2 p.m. ET, could indicate how fast and how far policymakers will proceed in trimming several trillion dollars from the stash of assets purchased to stabilize financial markets through the pandemic.
While estimates of the impact vary, Fed Chair Jerome Powell after the March meeting said the reductions might have the same effect as an additional quarter-point increase in short-term rate.