Tech Stocks Tumble as Inflation Fears Mount Amid Robust Economic Signals

U.S. stocks declined, mainly due to technology shares, following robust economic data that sparked inflation concerns. The increase in job openings and services sector activity raised the 10-year Treasury yields, affecting stocks adversely. Traders revised expectations about the Fed's interest rate cuts amid signs of economic resilience.

On Tuesday, U.S. stocks suffered a decline, heavily impacted by technology stocks. This downturn followed positive economic indicators which spurred concerns over a possible inflation rebound, potentially hindering the Federal Reserve's plans for monetary policy easing this year.

A Labor Department report unveiled an unexpected increase in job openings for November, compounded by accelerating services sector activity in December. This surge in economic performance drove benchmark 10-year Treasury yields to an eight-month peak at 4.677%, reflecting a robust economy.

Consequently, traders have revised their expectations for the Federal Reserve's first interest rate cut this year, now anticipating it in June, with the Fed likely to adopt a more cautious approach through 2025. The technology sector bore the brunt, with stocks like Nvidia falling by nearly 5% amid higher yields.

(With inputs from agencies.)