Internet and biotechnology stocks, at the center of almost every volatility scare the U.S. stock market has seen in an otherwise calm 2014, were back in the lurch yesterday.

Valuations for smaller biotechnology and social media stocks are stretched, the Federal Reserve said in its Monetary Policy Report delivered to Congress yesterday. The Russell 2000 Index of small-cap shares sank 1 percent, closing at the lowest level almost six weeks. The Nasdaq Biotechnology Index lost 2.3 percent and the Global X Social Media Index exchange-traded fund retreated 1.1 percent.