US stocks waded in the red on Wednesday, after a spike in Treasury yields unsettled investors already weighing whether recent data will shift the needle on interest rates.
The benchmark S&P 500 (^GSPC) fell 0.7%, while the Dow Jones Industrial Average (^DJI) drifted about 0.9% lower, shedding nearly 350 points. The Nasdaq Composite (^IXIC) also slid more than 0.7%.
Stocks are selling off as investors contemplate a jump in US bond yields after a government debt auction flopped, reflecting worries that the Federal Reserve will keep rates higher for longer.
The yield on five-year Treasurys rose to near four-week highs on Tuesday, while the 10-year yield (^TNX) topped the key 4.5% level. On Wednesday, the benchmark yield inched up further to trade around 4.57%
Those concerns appeared to be eclipsing the hopes for AI growth that lifted the Nasdaq to a record in the slipstream of Nvidia’s (NVDA) post-earnings rally.
Investors are trying to puzzle out what Tuesday’s stronger-than-expected consumer confidence print means for Fed policy making, but they are braced for a long wait for a pivot to rate cuts after a litany of warnings from its officials.
Read more: How does the labor market affect inflation?
The release of the Fed’s Beige Book later Wednesday could shed more light ahead of Friday’s reading on PCE, the central bank’s preferred inflation gauge.
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The economic outlook brightens…
And who doesn’t want some sunny, positive macro data on hump day? Not this guy, always on the hunt for upbeat things.
I come armed with a dose of just that.
More than eight in ten chief economists expect the global economy to either strengthen or remain stable this year, according to a new survey today from the World Economic Forum (WEF). That’s nearly double the proportion in January’s report.
The share of those predicting a downturn in global economic conditions declined to 17% from 56% in January.
Inflation could have further room to cool down, according to new research from the World Economic Forum. (World Economic Forum)
Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
