U.S. stocks fell on Tuesday, with tech names dragging down the NASDAQ and the broader markets as Treasury yields traded near three-month highs.
The Dow Jones Industrials loosed 340.16 points, or 1%, to 34,529.21,
The S&P 500 sank 69.47 points, or 1.6%, to 4,373.64.
The NASDAQ Composite tumbled 347.28 points, or 2.3%, to 14,622.69.
Tech shares were dropping in morning trading as a rapid rise in rates makes their future cash flows less valuable, and in turn makes the popular stocks appear overvalued. Higher rates also hinder tech companies' ability to fund their growth and buy back stock.
Facebook and Alphabet shares lost roughly 3% in morning trading, while Amazon dropped more than 2%. Large chip stocks struggled, with Nvidia sliding more than 3%.
The drop in tech dragged down sentiment on the markets though there were pockets of strength. Energy stocks like Exxon rose in early trading as WTI crude topped $76 a barrel. Shares of Ford rose 1.4% after the company announced plans to build new production facilities in the U.S.
Also weighing on sentiment was a budget showdown in Washington. Senate Republicans blocked a House-passed bill Monday that would have funded the government into December and suspended the debt ceiling until December 2022.
Congress must approve government funding by Friday to avoid a shutdown, and Treasury Secretary Janet Yellen warned Congress in a letter on Tuesday that lawmakers need to raise the debt limit by Oct. 18 to avoid a government default.
Thursday marks the final day of trading of September and the third quarter. The Dow is down 1.4% for the month, and the S&P 500 is off by 1.8%. The NASDAQ has lost 1.9% in September.
Prices for 10-Year Treasurys sagged, raising yields to 1.54% from Monday's 1.49%. Treasury prices and yields move in opposite directions.
Oil prices dipped 16 cents to $75.29 U.S. a barrel.
Gold prices subtracted $14.80 to $1,737.20 U.S. an ounce.