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Dow drops 600 points as October rout continues, tech stocks lead slide

Stocks sank on Wednesday as a steep decline in tech shares and worries of rapidly rising rates sent Wall Street on pace for its worst day in six months.

The Dow Jones Industrial Average traded more than 600 points lower as Intel and Microsoft fell more than 2.5 percent each. The Nasdaq Composite plummeted 3 percent.

The S&P 500 dropped 2.5 percent, with the tech sector underperforming. The broad index was also headed for a five-day losing streak — which would be its longest since late 2016 — and fell below its 50-day moving average, a widely followed technical level.

Both the Dow and S&P 500 were also on pace for their worst day since March.

The major indexes have fallen sharply this month. For October, the S&P 500 and the Dow are down more than 3.6 percent and 2.5 percent, respectively. The Nasdaq, meanwhile, has lost more than 6.5 percent.

Rising rate fears and a pivot out of technology stocks have made it a rough last few days. The Dow has dropped four of the last five sessions, losing nearly 900 points over that span.

Shares of Amazon declined nearly 4 percent, while Netflix slid 6.3 percent. Facebook and Apple also fell more than 2 percent each.

“People are getting out of the high-flying tech names right now,” said Larry Benedict, CEO of The Opportunistic Trader. “I think people are under-hedged; there could be more pain ahead.”

Worries about a sharp rise in interest rates also pressured equities. The 10-year Treasury note yield traded around 3.23 percent a day after hitting its highest level since 2011. The two-year yield, meanwhile, reached its highest mark since 2008. The speedy rise in yields has sent worries through Wall Street of a potential slowdown in the economy.

“Portfolio managers tend to move to the sidelines in a skittish tape out of fear of suffering from a quick and sharp pullback,” said Jeremy Klein, chief market strategist at FBN Securities.

CONTINUE @ CNBC