Tech stocks are following up their worst month of the year with a rough start to October as a spike in interest rates pushes investors out of risky assets.

The Nasdaq fell 1.9% on Tuesday to close at 13,059.47. The tech-heavy index declined 5.8% in September. While it’s still up 25% this year, the Nasdaq is trading at its lowest level since May.

Airbnb shares sank 6.5%, their second-biggest drop of the year, after analysts at KeyBanc downgraded the stock to the equivalent of a hold from a buy. The firm lowered its adjusted earnings expectations through 2025 as consumers shift back to buying more physical goods.

“Our call is that leisure travel has experienced a material recovery from 2021-2023E, resulting in outsized margin expansion,” the analysts wrote. “As these tailwinds fade,” they continued, growth in room nights and experiences as well as the company’s average daily rate could be hurt.

Like most tech stocks that were viewed as growth engines during the Covid-19 pandemic, Airbnb rallied in 2021 — just after its Nasdaq debut — and then sank last year. It has bounced back in 2023 but rising interest rates and ongoing concerns about high energy prices and the potential for a recession have investors rotating out of the stock of late.

Higher bond yields are giving money managers opportunities to make money in fixed income while driving up the borrowing costs for consumers.

The 10-year Treasury yield last traded at 4.8%, reaching its highest level on Tuesday in 16 years. The benchmark yield has surged in the past month as the Federal Reserve pledged to keep interest rates at a higher level for longer. The 30-year Treasury yield also climbed to its highest since 2007.

Among mega-cap tech stocks, Amazon suffered the steepest drop, falling 3.7% to $124.72. Amazon is coming off its worst month since February as the company faces the potential of a disappointing holiday shopping season and a massive antitrust lawsuit from the Federal Trade Commission.

Microsoft slid 2.6% and Meta fell 1.9%.

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