Tech shares suffer as Nasdaq drops 2%, while the Dow experiences a 400-point decline due to rising interest rate concerns.

On Monday, the stock market declined as investors became more worried that the recent three-year high in U.S. interest rates would negatively impact the economy.

On Monday, the 10-year Treasury yield surpassed 2.79% for the first time since January 2019, indicating that the Federal Reserve is preparing to implement stricter monetary policy.

The Nasdaq Composite fell 2.18% to 13,411.96, with growth stocks taking the brunt of the blow from higher rates. The Dow Jones Industrial Average dropped 413.04 points, or 1.19%, to 34,308.08. The S&P 500 also slid 1.69% to 4,412.53.

Despite experiencing a decline of more than 5% in April, the Nasdaq has rebounded from its rough start to the year, which saw it fall into correction territory at one point. The index is now down 17% from its all-time high.

According to Art Hogan, chief market strategist at National Securities, if we examine the factors influencing market movements today, we can see a reflection of the trends in the Treasury yield environment. It is challenging to predict what will disrupt this pattern except for a brief period when rates stabilize or begin to decline slightly.

Investors have been deterred from investing in riskier assets, such as tech stocks, due to concerns over higher interest rates. On Monday, tech stocks led to losses, with semiconductor stocks such as AMD and Nvidia declining 5.2% and 3.6%, respectively.

On Monday, oil prices fell due to concerns about the impact of Covid lockdowns in China on global demand. Brent crude decreased by 4.18% to $98.48 per barrel, while West Texas Intermediate crude futures dropped by 4.04%, settling at $94.29 per barrel.

Energy stocks slid nearly 6.3%, with some falling 4.8% and others losing 4.9%.

Despite the broader market's negative trend, airline stocks saw positive growth, with spikes of 4%, 1%, 2.3%, 3.4%, and 1.1%.

After spinning off WarnerMedia and merging with Discovery, AT&T's stock surged 7.7%. JPMorgan analysts approved of the decision and gave the company an overweight rating, stating that the stock is currently trading at a discount.

After CEO Parag Agrawal announced that Elon Musk had abandoned his plan to join the company's board, Twitter's stock experienced a drop of more than 8% in premarket trading. However, the stock later gained 1.7% in Monday trading.

On Tuesday, inflation could see a rise again, with the consumer price index predicted to increase by 8.4% annually, according to the consensus estimate of economists surveyed by Dow Jones.

Loretta Mester, Cleveland Fed President, stated on "Face the Nation" that she believes the Fed can control inflation without causing significant harm to the economy.

"Given the current global and economic conditions, there is a higher likelihood of a recession, but I remain optimistic and believe the expansion will persist," she stated.

The supply chain issues contributing to inflation in the U.S. will be intensified by the Covid lockdowns in China, according to Mester.

This week, major banks and airlines will begin reporting their first-quarter earnings, with and reporting on Wednesday and Thursday, respectively.

The corrected version of the story has the correct spelling of Mester's last name.