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Stock market today: Dow leads stock slide as rising Treasury yields rattle nerves
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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