A late-afternoon burst of buying on Wall Street helped reverse most of a stock market sell-off Tuesday, nudging the S&P 500 to its first gain after a five-day losing streak.
The benchmark index eked out a 0.1% gain after having been down more than 1.8% earlier. The Nasdaq lost 0.5% as technology stocks fell for a sixth straight day. The tech-heavy index had been down nearly 4%. The Dow Jones Industrial Average, which is less exposed to tech stocks than the two other indexes, managed to rise 0.1%.
The S&P 500 index rose 4.87 points to 3,881.37. The Dow gained 15.66 points to 31,537.35. The Nasdaq lost 67.85 points to 13,465.20.
Smaller company stocks fell more than the broader market. The Russell 2000 small-cap index slid 19.76 points, or 0.9%, to 2,231.21. The index, the biggest gainer so far this year, clawed back from a 3.6% slide.
While eventually higher bond yields impact big dividend-paying stocks like consumer staples, utilities and real estate, they tend to impact stocks that have big valuations like technology stocks much earlier. Tech stocks tend to have higher-than-average price-to-earnings ratios, which values a stock on how much the company earns in in profits each year versus its stock price. The S&P 500 index is currently trading at a price-to-earnings ratio of 32, historically high by any measurement, while the price-to-earnings ratio of a company like Amazon is north of 75.
Jablonski expects the sell-off in technology stocks will be short-lived, though she adds that a further increase in the 10-year Treasury yield could be “a different story.”