Falling tech stocks in China and Hong Kong pulled Asia’s markets sharply lower on Wednesday, as recent gains in U.S. Treasury yields put lofty equity valuations under pressure even as bond markets stabilised.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.8% and has lost 3.2% for the week so far.

Chinese blue chips fell 3% and the Hang Seng headed for its sharpest daily fall in nine months with a 3.4% drop that was further stoked by a rise in stock-trading stamp duty.

Japan’s Nikkei fell 1% and mining shares dragged Australia’s ASX 200 down by 0.9%. S&P 500 futures dropped 0.6%, while EuroSTOXX 50 futures fell 0.2% and Britain’s FTSE futures fell 0.7%.

On Tuesday U.S. Federal Reserve Chairman Powell did not seem too perturbed by a selloff in Treasuries that has driven 10-year yields up by 40 basis points this year, telling Congress it was a statement on the market’s confidence in the pandemic recovery.

But he cautioned that the economy remained “a long way” from employment and inflation goals and said that rates would stay low and bond buying would proceed apace until there was “substantial further progress”.

“Powell has done enough to dampen the upswing in bond yields, but he has not derailed it,” said Vishnu Varathan, head of economics and strategy for Mizuho Bank in Singapore.

“Yields are consolidating and not retreating – and that’s a result of this optimism that’s driving bond yields which he hasn’t pushed back against expressly.”

Ten-year Treasury yields fell about two basis points after his remarks and more or less held there through the Asia session to trade at 1.340%. Wall Street indexes recouped losses but the tech heavy Nasdaq closed 0.5% lower.

Tech stocks are particularly sensitive to rising yields because their value rests heavily on earnings in the future, which are discounted more deeply when bond returns go up.