U.S. stocks bounced back from a sharp selloff but still closed at a two-week low as megacap tech shares sold off.

Losses for Amazon.com, Microsoft Corp. and Facebook Inc. pushed the tech-heavy Nasdaq 100 down more than 5 per cent at one point, though it pared those declines to just over 1 per cent as the day wore on and investors spotted bargains. Gains in financial shares limited losses in the S&P 500 Index, which ended the week down 2.3 per cent at the lowest level since Aug. 21.

Treasury yields jumped while the dollar slipped. Oil fell below US$40 a barrel to reach the lowest since late June.

The worst of Friday’s stock selloff appeared to stem from concern that the recent run-up in tech shares wasn’t tied to broad investor sentiment, but instead was driven by outsize options trades from one firm. The Financial Times reported that SoftBank bought billions of dollars in tech derivatives before the rout that began Thursday.

Traders are seeking to find an appropriate valuation for tech stocks and gauge the health of the U.S. economy as the coronavirus pandemic rages on after having killed more than 180,000 Americans. While the industry is generating blockbuster profits during the stay-at-home lockdowns, there’s also evidence that high-flying names have become overheated.

“It’s those crowded names that were over-owned that are being sold again,” said Dan Russo, chief market strategist at Chaikin Analytics. “It’s the lofty valuations, the stocks just were stretched.”

Elsewhere, emerging-market stocks fell for a third day. European shares slumped. Asian shares dropped, with Australia’s benchmark recording the biggest decline since May.

Here are the latest market moves:

Stocks

• The S&P 500 Index fell 0.8 per cent at 4 p.m. New York time.
• The Nasdaq 100 Index fell 1.3 per cent.
• The Stoxx Europe 600 Index fell 1.1 per cent.
• The MSCI Asia Pacific Index dropped 1.2 per cent.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1 per cent.
• The euro was little changed at US$1.1847.
• The Japanese yen was little changed at 106.21 per dollar.

Bonds

• The yield on 10-year Treasuries increased eight basis points to 0.71 per cent.
• Germany’s 10-year yield rose two basis points to -0.48 per cent.
• Britain’s 10-year yield climbed three basis points to 0.26 per cent.

Commodities

• West Texas Intermediate crude fell 4.5 per cent to US$39.51 a barrel.
• Gold rose 0.2 per cent to US$1,935.23 an ounce.
• Silver rose 1.3 per cent to US$26.93 per ounce.

--With assistance from Adam Haigh, Todd White, David Wilson, Robert Brand and Sophie Caronello.