The rout in popular technology shares accelerated after the 10-year Treasury rate spiked 15 basis points, rattling investors already on edge about the threat of inflation.

Tesla Inc. dropped 5.5 per cent to erase its 2021 gains. The Ark Innovation ETF pushed its four-day rout past 15 per cent. Peloton Interactive Inc. cratered 18 per cent in the same time. Zoom Video Communications Inc. is on its longest-ever losing streak and at a two-month low.

Carnage is spreading among the previously high-flying stay-at-home darlings that drove 2020’s historic stock rebound as the lastest surge in yields took the 10-year rate past 1.5 per cent for the first time in a year. For the likes of Tesla, Zoom and other pandemic winners that notched triple-digit gains last year, anxieity is mounting that the group year won’t be able to justify elevated valuations.

“It all has to do with the rise in long-term rates,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Since higher rates are negative for techs, it’s having a bigger impact on them. Also, higher rates have a bigger impact on the names that have seen the biggest moves.”

Thursday’s rout in stocks popular among retail traders and hedge funds alike came as the broader universe of technology stocks took another beating. The Nasdaq 100 Index sank 3.4 per cent to the lowest since October. Small caps in the Russell 2000 also plunged more than 3 per cent.

The rate rise came as vaccine rollouts and a likely federal spending bill prompted economists up and down Wall Street to ratchet up their 2021 growth forecasts, fueling inflation worries. While strong economic growth is generally positive for stocks, if rates rise too quickly, it can spook investors.

“The trajectory of the increase is giving some equity investors pause about what if yields keep going up at this rate,” David Donabedian, chief investment officer at CIBC Private Wealth, said in a phone interview.

As the 10-year yield began to spike following a weak auction of seven-year notes, equity traders rushed to the exits. A net of 1,739 stocks were on a down tick at one point, the second-biggest bout of coordinated selling of the year.

“It’s pretty ugly,” said Mike Bailey, director of research at FBB Capital Partners. “We are seeing another correction fitting with a pattern we saw in September and October. My sense is we are in the latter innings of this third beatdown for big tech.”