Key keywords: Nasdaq, equity market losses, WTI crude oil, 10-year US Treasury yield, borrowing costs, Federal Reserve interest rate policy, tech sector sell-off, inflation outlook U.S. stocks extended a sharp sell-off during Thursday’s trading session, with the Nasdaq Composite leading declines across all major Wall Street benchmarks, as investors reacted to the dual pressure of spiking oil prices and multi-year high borrowing costs that threaten to erode corporate profit margins and slow broader economic growth. WTI crude oil crossed the $90 per barrel threshold this week for the first time in 10 months, driven by extended voluntary production cuts from Saudi Arabia and Russia that are set to run through the end of 2023. The sustained rally in energy prices has reignited fears of reaccelerating headline inflation, after months of cooling price growth that led markets to price in an end to the Federal Reserve’s rate hike cycle as early as the fourth quarter of 2023. Compounding inflation concerns, the 10-year U.S. Treasury yield, a global benchmark for consumer and corporate borrowing costs, climbed to 4.3% on Thursday, hovering just below the 15-year high it hit in August 2023. Higher risk-free rates disproportionately weigh on the high-growth tech stocks that make up nearly 40% of the Nasdaq’s weighting, as their future cash flows are discounted at higher rates, cutting into their present-day valuations. By midday trading, the Nasdaq had fallen 1.8%, outpacing the 1.2% drop for the S&P 500 and 0.9% decline for the Dow Jones Industrial Average. Mega-cap tech names led the downturn, with Apple falling 2.2%, Microsoft shedding 1.9%, and semiconductor giant Nvidia dropping 3.1% as investors rotated out of high-valuation growth assets. According to CME Group’s FedWatch Tool, market participants now price in a 47% chance of a 25 basis point rate hike at the Fed’s November policy meeting, up from just 28% one week ago. Fed officials have repeatedly noted in recent public remarks that sticky core inflation, driven by rising energy and shelter costs, could require additional monetary tightening before the end of the year. Analysts at Goldman Sachs estimate that a sustained 50 basis point rise in 10-year Treasury yields would cut 2024 S&P 500 earnings per share by 2% to 3%, with tech, consumer discretionary and real estate sectors facing the steepest downward revisions. Investors are now turning their attention to next week’s August consumer price index report, which will serve as a key input for the Fed’s rate decision at its September 19-20 policy meeting.