Rising yields and tech sell-off push QQQ, VOO and SPY lower

Major exchange-traded funds tracking large U.S. equities fell during regular U.S. trading as rising Treasury yields and a broad sell-off in technology stocks pushed Invesco QQQ, Vanguard S&P 500 ETF (VOO) and SPDR S&P 500 ETF Trust (SPY) into negative territory and pulled benchmark indexes lower.

QQQ, which follows the Nasdaq-100 and has heavy exposure to technology and growth companies, led losses. VOO and SPY, which track the S&P 500, posted broader declines driven by the largest market-cap names in the index.

Long-term Treasury yields rose in the session, prompting investors to reassess valuations for stocks with a larger share of expected future earnings. Higher yields raise the discount rate applied to those future profits and can reduce present valuations for growth-oriented companies.

Traders cited profit-taking and position adjustments in large-cap technology stocks as amplifying selling pressure across ETFs. Several major chipmakers, cloud software firms and consumer-facing tech companies recorded declines as market participants reduced exposure to long-duration assets.

Market breadth narrowed as selling concentrated on the biggest names. VOO and SPY were pulled down by the weight of the same technology giants that dominate QQQ, while some cyclical sectors and financials recorded smaller moves or modest gains.

Options activity in the major ETFs increased, with higher volume in contracts used to hedge positions or to position for additional volatility.

The link between the bond and equity moves affected trading in other asset classes. Some investors shifted allocations into shorter-duration bonds, dividend-focused funds and value-oriented equities perceived as less sensitive to rising yields.

A market strategist at a U.S. brokerage commented, “A rise in real yields tends to pressure growth stocks because their cash flows are further in the future.”

Market participants said they will monitor upcoming economic data and Treasury auctions for signals on whether yields will stabilize, a factor likely to influence near-term equity performance.