U.S. stocks dropped to the lowest levels in more than a week and Treasury yields edged higher amid growing concern rising borrowing costs could sap a rally that’s driven equity values to historic highs.

The tech-heavy Nasdaq 100 slumped 0.4 per cent, the third consecutive decline. The energy and communication services sectors weighed on the S&P 500, which posted its biggest drop since Jan. 29. A report earlier showed initial jobless claims rose more than expected. Walmart Inc. fell 6.5 per cent after saying it will increase spending on worker salaries and automation.

“This rise in rates will certainly test the mettle and staying power of the bulls,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Yields on 10-year Treasuries climbed as high as 1.32 per cent before paring the increase. Yields reached the highest levels in a year earlier this week. Technology companies such as Tesla Inc., which have seen their valuations surge, are often seen as the most at risk of a pullback.

“The market is starting to get a little wary of this ‘bad news is good news’ scenario,” said Matt Benkendorf, chief investment officer of Vontobel Quality Growth. “Now you’ve seen a bit of a mixed picture, which scrambles the monetary policy visibility.”

In currency markets, the pound touched the strongest level versus the euro since March amid continued optimism over the nation’s vaccine rollout. The dollar weakened against Group of 10 peers. Bitcoin retreated, paring its weekly gain to 5 per cent.

Commodities were broadly higher, with lumber futures climbed to a record US$1,004.90 per 1,000 board feet. Copper in London hit a fresh 8-year high as China’s traders returned from holiday with metals markets in a bullish mood.

Meanwhile, the global oil market is grappling with a crisis caused by freezing temperatures in the U.S. More than 4 million barrels a day of output -- almost 40 per cent of the nation’s crude production -- is now offline, according to traders and executives.

Stocks in Asia dropped overnight, with the Hang Seng Index down 1.6 per cent and Japan’s Topix index 1 per cent lower.

These are some of the main moves in markets:

Stocks

The S&P 500 Index decreased 0.4 per cent to 3,914 as of 4:03 p.m. New York time, the lowest in more than a week on the largest dip in almost three weeks.
The Dow Jones Industrial Average decreased 0.4 per cent to 31,493.93, the first retreat in a week and the biggest dip in almost three weeks.
The Nasdaq Composite Index dipped 0.7 per cent to 13,865.36, the lowest in almost two weeks on the largest dip in almost three weeks.
The Stoxx Europe 600 Index decreased 0.8 per cent to 412.70, the lowest in a week on the biggest dip in almost three weeks.
The MSCI All-Country World Index decreased 0.5 per cent to 679.13, the lowest in more than a week on the largest dip in almost three weeks.

Currencies

The Bloomberg Dollar Spot Index fell 0.2 per cent to 1,126.71, the biggest fall in more than a week.
The euro gained 0.4 per cent to US$1.2092, the largest advance in more than a week.
The Japanese yen strengthened 0.2 per cent to 105.65 per dollar, the biggest advance in more than a week.
The British pound jumped 0.9 per cent to US$1.3975, the strongest in almost three years on the largest climb in more than five weeks.

Bonds

The yield on 10-year Treasuries gained two basis points to 1.29 per cent.
Germany’s 10-year yield rose two basis points to -0.35 per cent, the highest in more than eight months.
Britain’s 10-year yield climbed five basis points to 0.622 per cent, the highest in 11 months.

Commodities

West Texas Intermediate crude sank 1.8 per cent to US$60.06 a barrel, the first retreat in a week and the largest tumble in almost five weeks.
Gold depreciated 0.1 per cent to US$1,774.36 an ounce, reaching the weakest in almost eight months on its sixth consecutive decline.
Copper jumped 2.3 per cent to US$3.91 a pound, the highest on record with the largest jump in more than six weeks.