Andy Kiersz/Insider/Bloomberg
Stock markets roared higher in 2020 and 2021 as the Federal Reserve pumped trillions of dollars into the economy and slashed interest rates to record lows.
Technology stocks were the big winners, with the tech-heavy Nasdaq 100 index shooting more than 130% higher between the bottom of the coronavirus-driven sell-off in March 2020 and November 2021.
Yet the Fed has abruptly pivoted to inflation-fighting mode, as it tries to cool the hottest price rises for 39 years. It's bringing its bond purchases to an end and is likely to hike interest rates numerous times this year.
The prospect of higher rates has caused bond yields to shoot up, as investors demand higher returns.
Higher bond yields have a huge effect on the rest of the market. Not only do they make the bond market look somewhat more attractive, they dramatically alter calculations about stocks, because they erode the present value of future earnings. Higher yields also increase companies' borrowing costs and, by and large, benefit banks.
Tech stocks, particularly at the more speculative end of the spectrum, have tumbled.