Along with tech stocks, the FAANGs " Facebook, Amazon, Apple, Netflix and Alphabet" have led the market rally.
US markets are coming off their steepest losses in eight months.
The increase in yields from these bonds - which are parcels of USA government debt - can hurt stocks since they will provide competition for investors' cash. Concerns about consumer spending have also led to jitters about U.S. companies as they prepare to unveil results for the third quarter of the year over the coming weeks.
Shares in upscale jewellery retailer Tiffany & Co and perfume maker Estee Lauder both fell 7 percent after a warning from French luxury goods firm LVMH about softening demand in China. Amazon skidded 6.2 percent to $1,755.25. Snap, the parent company of the messaging app Snapchat, fell 4.8pc and sank to a new all-time low. Tech stocks saw slight recoveries as well after being hit hard on Wednesday.
The decline came amid a widespread selloff on Wall Street, which spilled over into global markets overnight as investors reacted to the "sheer magnitude of the move", OANDA analyst Stephen Innes wrote in a note to investors.More news: Concerns growing over rare polio-like condition in children
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Earlier on Wednesday, Sears Holdings plunged on reports that the struggling retailer is preparing to file for bankruptcy. Those higher rates have been the catalyst for recent selling, stoking concerns that slower growth would impinge on corporate profits. Over the years, Sears has closed hundreds of stores and sold several famous brands. The Nasdaq dropped more than 4% in the worst percentage decline since June 2016. "This meltdown isn't just a mild case of the sniffles suggesting the latest sneeze from the USA equity market could morph into a global markets pandemic". Delta Air Lines shares rose 3.8 percent after the airline beat profit expectations.
The 10-year Treasury yield rose to 3.22 per cent from 3.20 per cent late Tuesday after earlier touching 3.24 per cent.
Benchmark U.S. crude oil fell 2.4 per cent to $73.17 a barrel in NY. Investors see many of these countries as being vulnerable to higher US interest rates, which can pull away investment dollars.
The dollar fell to 112.59 Japanese yen from 113.05 yen late Tuesday. United States gold futures settled up $1.9, or 0.16 percent, at $1,193.4. The euro rose to $1.1525 from $1.1496.
The two-day 4.7-percent drop in the SPDR S&P 500 ETF (NYSE: SPY) comes after the S&P 500 gained 22.2 percent in the previous 18 months. The British pound rose to $1.3197 from $1.3146.