The CBOE Volatility Index and VIX-related exchange traded funds surged on Tuesday as U.S. equities retreated in the face of bond yields hitting a two-year high.

Among the best-performing non-leveraged ETFs of Friday, the iPath Series B S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) increased 6.5% and the ProShares VIX Short-Term Futures ETF (NYSEArca: VIXY) advanced 6.5%. Meanwhile, the CBOE Volatility Index climbed 16.4% to 22.3.

Investors dumped both stocks and bonds on Tuesday as the yield on benchmark 10-year Treasures hit 1.857%, its highest level in two years, the Wall Street Journal reports.

“The hot inflation prints have spooked the market that the Fed is going to move and so we are seeing this rise in yields,” Mona Mahajan, senior investment strategist at Edward Jones, told Reuters.

“It’s not only the rise in yields but the rapid rise in yields … that really does cause some indigestion in the market, but particularly in growth, higher valuation, more speculative asset classes,” Mahajan added.

Market participants expect the Federal Reserve to hike interest rates this year to wrangle inflationary pressures, and many believe the central bank could act more aggressively. Interest rate futures markets reveal that investors are betting on four to five interest rate hikes this year, according to CME Group.

“Markets are still trying to find a level for rate increases. It was only in October the market was expecting one rate hike for 2022 and now it’s expecting four,” Edward Park, chief investment officer at U.K. investment firm Brooks Macdonald, told the WSJ. “That’s reflecting the level of uncertainty we have in the market right now about the path of Fed policy.”

High-growth stocks, notably the technology segment, have suffered the worst of the selling, as growth company earnings appear less attractive in a rising rate environment.

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