NEW YORK: Wall Street stocks tumbled early Tuesday on growing worries over higher lending rates, while shares of Activision Blizzard soared on its proposed takeover by Microsoft.
The yield on the 10-year US Treasury note -- a proxy for US interest rate expectations -- soared to a two-year peak above 1.8 percent as investors bet on imminent moves by the Federal Reserve to tighten monetary policy.
Briefing.com analyst Patrick O'Hare pointed to "new chatter" that the Fed could in March raise the target funds rate by twice the level previously thought.
"Rising interest rates and the fear of rising interest rates have been a thorn in the stock market's side in early 2022," O'Hare said. "That thorn is being twisted this morning."
About 45 minutes into trading, the Dow Jones Industrial Average was down 1.5 percent at 35,364.15.
The broad-based S&P 500 fell 1.3 percent to 4,602.70, while the tech-rich Nasdaq Composite Index shed 1.2 percent to 14,722.52.
Among individual companies, Activision Blizzard surged 28.5 percent after Microsoft announced Microsoft announced Tuesday a $69 billion deal to purchase US gaming giant. Microsoft dipped 0.2 percent.
Goldman Sachs sank 7.8 percent as it reported record annual profits but fourth-quarter profits that missed expectations due to higher costs.