On Tuesday, stock markets experienced a decline, primarily due to the heightened attention on surging Treasury yields, reaching a 16-year peak, reported CNBC.
The Dow Jones Industrial Average witnessed a 400-point drop, equivalent to a 1.2% decrease. Simultaneously, the S&P 500 saw a 1.3% decline, and the Nasdaq Composite registered a notable 1.7% decrease.
Stock prices reached their lowest points of the day as Treasury yields continued to rise, driven by the release of the August job openings survey. This survey indicated that the job market remained tight, with 9.6 million open positions during the month. Economists, as polled by Dow Jones, had previously expected 8.8 million job openings.
On Tuesday, Veralto and spice manufacturer McCormick & Company led the losses in the broader market index, with both stocks falling by more than 9%. Cruise company Carnival experienced a 6.3% decline, followed by Airbnb and Viatris, both of which saw drops of over 5%.
The 10-year Treasury yield reached 4.756%, marking its highest level since August 15, 2007. Over the past month, this benchmark yield has surged, as traders assess the potential for a more prolonged period of tightening by the Federal Reserve. Additionally, the 30-year Treasury yield climbed to 4.891%, reaching its highest level since October 17, 2007.
Investors have grown concerned about the possibility of higher interest rates persisting for an extended period, fearing that such a scenario could lead to an economic recession. Consequently, Treasury yields have reached levels not seen in more than a decade.
Alex McGrath, the Chief Investment Officer at NorthEnd Private Wealth, emphasized that the rise in yields poses a significant challenge to equities. He stated, “Unless that trend reverses, it will continue to impede equity markets throughout the year.”
Joseph Cusick, a portfolio specialist at Calamos Investments, pointed out that higher interest rates do not necessarily spell trouble for the stock market, particularly if they are associated with robust economic activity that benefits earnings prospects. However, he added that higher rates become problematic when they are seen as a haven in an uncertain environment.
Following a mixed session on Wall Street, which was influenced by a short-term agreement reached by lawmakers to avert a government shutdown over the weekend, investors are eager to put a disappointing September behind them. All three major stock indexes closed both the month and the third quarter in negative territory, with the S&P 500 alone dropping nearly 5% in September.
This highlights the significance of key economic reports, such as last month’s payroll report scheduled for release on Friday, as well as the commencement of the earnings reporting season next week, which will be closely monitored by investors.
The Dow Jones Industrial Average witnessed a 400-point drop, equivalent to a 1.2% decrease. Simultaneously, the S&P 500 saw a 1.3% decline, and the Nasdaq Composite registered a notable 1.7% decrease.
Stock prices reached their lowest points of the day as Treasury yields continued to rise, driven by the release of the August job openings survey. This survey indicated that the job market remained tight, with 9.6 million open positions during the month. Economists, as polled by Dow Jones, had previously expected 8.8 million job openings.
On Tuesday, Veralto and spice manufacturer McCormick & Company led the losses in the broader market index, with both stocks falling by more than 9%. Cruise company Carnival experienced a 6.3% decline, followed by Airbnb and Viatris, both of which saw drops of over 5%.
The 10-year Treasury yield reached 4.756%, marking its highest level since August 15, 2007. Over the past month, this benchmark yield has surged, as traders assess the potential for a more prolonged period of tightening by the Federal Reserve. Additionally, the 30-year Treasury yield climbed to 4.891%, reaching its highest level since October 17, 2007.
Investors have grown concerned about the possibility of higher interest rates persisting for an extended period, fearing that such a scenario could lead to an economic recession. Consequently, Treasury yields have reached levels not seen in more than a decade.
Alex McGrath, the Chief Investment Officer at NorthEnd Private Wealth, emphasized that the rise in yields poses a significant challenge to equities. He stated, “Unless that trend reverses, it will continue to impede equity markets throughout the year.”
Joseph Cusick, a portfolio specialist at Calamos Investments, pointed out that higher interest rates do not necessarily spell trouble for the stock market, particularly if they are associated with robust economic activity that benefits earnings prospects. However, he added that higher rates become problematic when they are seen as a haven in an uncertain environment.
Following a mixed session on Wall Street, which was influenced by a short-term agreement reached by lawmakers to avert a government shutdown over the weekend, investors are eager to put a disappointing September behind them. All three major stock indexes closed both the month and the third quarter in negative territory, with the S&P 500 alone dropping nearly 5% in September.
This highlights the significance of key economic reports, such as last month’s payroll report scheduled for release on Friday, as well as the commencement of the earnings reporting season next week, which will be closely monitored by investors.
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