In the background, long-term interest rates for US Treasury bonds have surged to their highest levels since 2011, leading to a dramatic fall in risk appetite for the stock market. Apple and Amazon both had their worst day in two and a half years. Nasdaq losers also include big names like Netflix, Nvidia, Adobe and Amazon - which also dropped somewhat similar to their cousins in the crypto market. She said they also fear that company profit margins will be squeezed by rising costs, including the price of oil.
"The tax cuts juiced earnings this year and that's not sustainable", he said.
Stocks and bonds traditionally have been in a tug of war for capital, but for the past 10 years bonds have had one arm tied behind their back, said Jack Ablin, chief investment officer and founding partner at Cresset Wealth Advisors in Chicago.
The Dow Jones Index was down 832 points, while the Nasdaq declined 4.1 percent, its worst session in two years. That hasn't happened since right before the 2016 presidential election.
On Wall Street, the Philadelphia Semiconductor index tumbled 4.46 percent after Swiss vacuum valve maker VAT Group said demand was softening from chip equipment makers.
The S&P 500 shed 1.53% to 2,839.43, on track for its steepest loss since June.
Asian markets tumbled on Thursday, after Wall Street slumped on a heavy selling of technology and internet stocks.
That's helped make technology stocks more volatile in the last few months.
New footage shows the devastating aftermath of Hurricane Michael in Florida
The town looked bruised, said Kathleen Troy, 57, as she and her husband walked their dog through dark streets, but not beaten. One of the hardest-hit spots was Mexico Beach, where Michael crashed ashore as a Category 4 monster with 155mph winds.
At the closing bell, the Dow Jones Industrial Average had lost 3.1 percent or 830 points to finish at 25,613.35, in the biggest fall since February.
At the time of this writing, Bitcoin had dropped 4 percent to $6,294, while Ethereum and EOS dived over 10 and 8 percent, respectively, according to the data on CoinGecko. The FAANGs, spread over three sectors, were down between 1.4 percent and 5.4 percent. Technology stocks fell especially sharply.
Insurance companies dropped as Hurricane Michael continued to gather strength and came ashore in Florida bringing winds of up to 155 miles an hour. Berkshire Hathaway dipped 4.7 percent to $213.10 and reinsurer Everest Re slid 5.1 percent to $217.73. "This meltdown isn't just a mild case of the sniffles suggesting the latest sneeze from the USA equity market could morph into a global markets pandemic". Higher rates can slow economic growth, erode corporate profits and make investors less willing to pay high prices for stocks.
But a recent International Monetary Fund warning on global growth taking a hit from trade disputes has hit confidence in the stock market, as has US Treasury yields at more than 7-year highs, signalling a tightening of capital globally.
This time around, strong economic data anxious bond investors, who sent the benchmark yield on Tuesday to 3.261 percent, the highest since early May 2011.
The move particularly affects high-growth tech companies which have been a source of huge returns in recent months.
After a long stretch of relative calm, the stock market has suffered sharp losses over the last week.