The Nasdaq composite index was down about 3 percent on Thursday afternoon, a drop that left the tech-heavy benchmark down more than 10 percent from the record high it reached in February. Such sell-offs are known as corrections, a Wall Street term that indicates something more serious than a garden-variety downturn.
Stocks that soared during the pandemic last year were slammed on Thursday. Shopify, which helps retailers develop e-commerce operations and saw its shares rise nearly 200 percent last year, was down 8 percent in afternoon trading. The tech security firm CrowdStrike, up more than 300 percent last year, was down almost 10 percent on Thursday. The cloud-based information security firm Zscaler, which rose 330 percent last year, tumbled 6 percent.
Some of the largest stocks were also lower, weighing on both the Nasdaq and the broader S&P 500 index.
Apple dropped more than 1.5 percent and is down 16 percent since Jan. 25. Tesla dropped more than 6 percent, bringing its losses from its high on Jan. 25 to 31 percent.
The 10 percent threshold for a correction is arbitrary, but it is often an indication that investors have turned more pessimistic about the markets.
The decline in the stock markets was set off as investors, concerned that an economic recovery would mean the Federal Reserve would pull back on its easy-money policies, poured money into government bonds, which are considered more secure.