The Nasdaq Composite fell 5% in late trading as concerns over potential interest rate hikes by central banks weighed on investor sentiment.
The decline reflects growing unease among traders about the impact of higher borrowing costs on tech stocks, which are particularly sensitive to changes in monetary policy.
The market move follows a broader sell-off in growth-oriented assets, with investors shifting toward more defensive positions.
The drop in the Nasdaq highlights the fragility of equity valuations in a tightening rate environment, especially for companies with high price-to-earnings multiples.
The Federal Reserve has signaled a cautious approach to rate policy, but uncertainty remains about the timing and magnitude of future hikes.
This ambiguity has left markets vulnerable to sharp repricing, particularly in sectors like technology where earnings growth is expected to slow in a higher-rate world.