Wall Street stumbles on rising Treasury yields, inflation fears

A street sign in front of the New York Stock Exchange on Wall Street in New York, February 10, 2009. REUTERS/Eric Thayer/File Photo

NEW YORK (Reuters) – Wall Street stocks ended sharply lower on Tuesday in a broad sell-off, driven by rising US Treasury yields, deepening concerns about persistent inflation and contentious negotiations over Washington’s debt ceiling.

All three major US stock indexes fell about 2% or more, with interest rate-sensitive technology stocks and technology-related stocks gaining weight as investors lost their appetite for risk.

S&P 500 . Index (.SPX) The Nasdaq Composite Index (nineteenth) It was on track for its biggest monthly drop since September 2020.

“The big picture is the sudden surge in yields last week, which led to a ‘sell first, ask questions later’ mentality,” said Ryan Dettrick, chief market analyst at LPL Financial in Charlotte, North Carolina.

“(But) there are several factors affecting sentiment today,” Dietrich added. “Washington’s volatility with the debt ceiling, spending bill and potentially higher taxes has taken a toll on overall investor sentiment and led to a good-volume sell-off.”

The benchmark was also setting a course for the weakest quarterly performance since the COVID pandemic that brought the global economy to its knees.

Weakness was widespread across most asset classes, including gold, indicating a widespread sense of risk aversion.

US Treasury yields continued to rise, to the highest level since June, as inflation expectations rose and fears grew that the US Federal Reserve might shorten its timetable for tightening its monetary policy.

Treasury Secretary Janet Yellen said she expects inflation to end in 2021 near 4% and warned lawmakers of their failure to avoid a government shutdown as the nation nears exhausting borrowing capabilities that could cause “serious damage” to the economy. Read more

Senate Republicans appeared intent on defeating Democrats’ efforts to expand government borrowing power and avoid a potential US credit default. Read more

The conference board report showed consumer confidence unexpectedly weakened in September to the lowest level since February. Read more

Unofficially, the Dow Jones Industrial Average (.DJI) It fell 565.16 points, or 1.62%, to 34,304.21 Standard & Poor’s 500 (.SPX) It lost 90.34 points, or 2.03%, to 4,352.77 points, and the Nasdaq Composite (nineteenth) It fell 420.41 points, or 2.81%, to 14,549.56 points.

Of the 11 major sectors in the S&P 500, all but energy (.SPNY) Finished in red, with technology (.SPLRCT) and communication services (.SPLRCL) Suffering the largest percentage of losses.

Apple company (AAPL.O), Microsoft Corporation (MSFT.O)Amazon.com Inc (AMZN.O) and Alphabet Inc (GOOGL.O) Heavier weight on S&P and Nasdaq.

Ford Motor Company (FN) It was one of the few bright spots, as it came forward with the news that it will be joining Korean battery partner SK Innovation (096770.KS) To invest $11.4 billion to build an F-150 electric assembly plant and three US battery plants. Read more

Stephen Kolb reports. Additional reporting by Noel Randewicz in New York and Devik Jain in Bengaluru. Editing by Richard Chang

Our criteria: Thomson Reuters Trust Principles.

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