Technology stocks led a wide sell-off on Wall Street on Tuesday, as bond rates rose on increased fears that the Federal Reserve could move more aggressively than expected to combat rising inflation.

The S&P 500 dropped 1.8%, with around 90% of the equities in the benchmark index finishing in the red. The Nasdaq, which is highly weighted with technology companies, fell 2.6%. The Dow Jones Industrial Average dropped 1.5%.

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The major indices have lost ground this month as increasing inflation and the new outbreak of the virus pandemic drive investors to be cautious.

The S&P 500 dropped 85.74 points to 4,577.11, the Dow dropped 543.34 points to 35,368.47, and the Nasdaq dropped 386.86 points to 14,506.90. All of the indices set new lows for the year. The Nasdaq has taken the brunt of the losses this month, falling 7.3%. 

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This brings the index within 2.7% of a correction, which occurs when a stock or index loses 10% or more from its previous top. After establishing an all-time high on the first trading day of the year, the S&P 500 is down about 4% for the month.

The S&P 500 was dragged down by the technology sector on Tuesday. Apple was down 1.9%, while chipmaker Nvidia was down 3.9%.

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Banks also weighed hard on the market after Goldman Sachs reported a 13% drop in fourth-quarter earnings from the previous year. Goldman shares fell 7%, while JPMorgan fell 4.2%. Wells Fargo fell 2.4%.

Small-company stocks, a barometer of economic growth optimism, also fell. The Russell 2000 index dropped 66.23 points, or 3.1%, to 2,096.23.

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Activision Blizzard gained 25.9% on the news of a massive deal. The producer of games such as “Call of Duty” and “Candy Crush” is being purchased for $68.7 billion by Microsoft, which is down 2.4%.

Treasury yields have continued to rise as the Fed’s rate increase prospects have grown. The 10-year Treasury note reached 1.87% on Tuesday, its highest level since January 2020. Late Friday, it was at 1.77%.