Dow plunged more than 550 points as inflation fears rattle investors
The S&P recorded its worst session since May, while the Nasdaq had its worst day since March. For the Dow, this was only the worst drop since last week’s sell-off.
“It’s a rather low-key tantrum,” said Ed Yardeni, Yardeni’s head of research.
The 10-year Treasury yield, which is affected by inflation expectations, It rose to 1.54% around the time the closing bell. Bond yields and prices move in opposition to each other.
“The supply-side constraints that are at the core of the inflation we’re seeing … have in some cases gotten worse,” Powell told lawmakers at the hearing.
The stock market reacted little at the time, with comments in line with expectations, but Tuesday’s sell-off may still relate to tapering, the Fed’s operation to scale back its monthly purchases.
Debt ceiling discussion
Powell and Treasury Secretary Janet Yellen testified before Congress on Tuesday about the pandemic and the CARES Act.
“Both Democratic and Republican administrations have failed,” Yellen said. “It’s important to realize that.” This means that paying the bills for those deficits is a joint responsibility and should not be the responsibility of any party.”
While policymakers in Washington are busy, American consumer confidence is on the rise. The Conference Board’s index of consumer confidence fell for the third month in a row in September, said Lynn Franco, director of economic indicators at the Conference Board, “as the spread of the delta variable continued to dampen optimism.”
It’s not just stocks, bonds, and the economy that makes investors uncomfortable.
CNN’s Matt Egan and Julia Horowitz contributed to this report.