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Stocks dropped sharply Wednesday with tech shares leading markets lower on worries about higher inflation and as cryptocurrencies prices plunged. 

The Dow Jones Industrial Average fell 265 points, or 0.78%, to 33,795, the S&P 500 declined 0.73% and the Nasdaq sank 0.61%.

Bitcoin prices rebounded to above $39,000 after Tesla  (TSLA) – Get Report CEO Elon Musk indicated his electric vehicle company could hold its billion-dollar position in the world’s biggest digital currency.

Musk, whose criticism of bitcoin’s energy use, coupled with a suggestion Tesla could sell its $1.5 billion in holdings acquired earlier this year, helped – along with a renewed crackdown from China – tilt the digital currency into its biggest tailspin of the year this month, with prices falling below $30,000 on Wednesday.

However, Musk tweeted Wednesday emojis of so-called diamond hands, images that are typically interpreted as indications of a “hold” strategy for key assets. 

Cryptocurrency exchange Coinbase Global  (COIN)  came off earlier lows and was down 5.18%.

Investors’ anxiety over rising price pressures either will be eased or heightened by the release Wednesday of the minutes from the latest Federal Reserve meeting. Any hint of a crack in the central bank’s view that price increases will be “transitory” could trigger a sharp reaction in both equity and fixed income markets. 

The Fed has maintained the stance that a jump in inflation only will be temporary as the U.S. economy reopens. Investors will be monitoring the minutes to determine the central bank’s thoughts on price pressures and hints on when it might begin pulling back support.

“The economic recovery continues, as the recipe of vaccines, the reopening, and record stimulus all have combined to produce what should be one of the best years for growth ever,” said Ryan Detrick, chief market strategist for LPL Financial.

“Although some economic indicators could be peaking or about to peak, the stage is set for this cycle of growth to continue for many years, which may surprise some investors. We discuss why inflation might be in the headlines, but still shouldn’t be a major worry for investors,” he added.

Technology shares have been leading the Wall Street declines since the pricey growth stocks suffer the most from higher interest rates.

Stocks finished lower Tuesday as tech stocks were sold off during the late afternoon. The three benchmark stock indexes fell for a second straight day.

Bitcoin prices earlier Wednesday slumped to the lowest since January, while cryptocurrency peers such as Ethereum and Dogecoin traded heavily in the red, following a renewed crackdown on virtual currencies markets in China.

Bitcoin’s decline was sparked by a post on the official WeChat account of the People’s Bank of China which warned that digital tokens should not be used in either financial markets of the world’s second-largest economy – and the largest crypto market – given that they are not “real currencies.” 

Bitcoin has given up all the gains it made following Tesla’s 
announcement on Feb. 8 that it had purchased $1.5 billion of the digital asset. Part of the reason is Elon Musk’s surprise statement earlier this month that his company would no longer accept payments in Bitcoin

As for Tesla, shares fell 4.2% on Wednesday after a report said new registrations in China for its electric vehicles took a sharp downturn last month, raising concerns that the world’s biggest EV maker may be losing its grip in the world’s biggest market for battery-powered cars.