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NEW YORK: The Nasdaq slumped 2% on Wednesday as tech stocks extended their sell-off for a second straight day on mounting concerns over aggressive actions by the Federal Reserve to fight inflation, with minutes from the central bank’s March meeting on tap.

Shares of megacap growth companies such as Tesla Inc , Apple Inc and Amazon.com Inc tumbled between 2% and 5%, dragging the Nasdaq and the S&P 500 lower.

High-growth stocks, whose valuations stand to be pressured by higher bond yields, bore the brunt as the benchmark 10-year yield and the 2-year yield rose.

Fed Governor Lael Brainard said on Tuesday she expected a combination of interest rate hikes and a rapid balance sheet runoff, sparking losses on Wall Street.

“When real interest rates rise, and they rise rapidly, longer duration equities tend to have a rougher ride,” said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management Co.

“Real interest rates have moved up almost 100 basis points in a matter of months. The Nasdaq is going to have more of an acute pressure there versus the overall equity market.” The S&P 500 growth index fell 2.5% and was on track for its worst session in nearly a month.

The Federal Open Market Committee’s minutes, set to be released at 2 p.m. ET (1800 GMT), could indicate how fast and how far policymakers will proceed in trimming several trillion dollars from the stash of assets purchased to stabilize financial markets through the pandemic.

While estimates of the impact vary, Fed Chair Jerome Powell after the March meeting said the reductions might have the same effect as an additional quarter-point increase in short-term rate.

Traders now see 82% odds of a 50 basis points rate hike at the central bank’s meeting next month.

The CBOE Volatility index, also known as Wall Street’s fear gauge, rose to 24.21 points, its highest since March 18.

US stock markets had a rough start to the year, with growth stocks pummeled in the first quarter, dropping 8.8% on the prospects of a more hawkish Fed, compared to the 0.7% decline in value stocks.

At 12:40 p.m. ET, the Dow Jones Industrial Average was down 263.22 points, or 0.76%, at 34,377.96, the S&P 500 was down 59.94 points, or 1.32%, at 4,465.18, and the Nasdaq Composite was down 378.68 points, or 2.67%, at 13,825.49.

Meanwhile, the United States targeted Russian banks and elites with a new package of sanctions on Wednesday that includes banning any American from investing in Russia, after Washington and Kyiv accused Moscow of committing war crimes in Ukraine.

Among other stock movers, JetBlue Airways Corp slid 7.8% after defending its unsolicited $3.6 billion bid to acquire ultra-low-cost carrier Spirit Airlines Inc, saying the company is “highly confident” of securing regulatory approval for the deal. Spirit Airlines fell 1.8%.

Declining issues outnumbered advancers for a 2.84-to-1 ratio on the NYSE and a 3.12-to-1 ratio on the Nasdaq.

The S&P index recorded 35 new 52-week highs and 21 new lows, while the Nasdaq recorded 25 new highs and 181 new lows.

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