Wall Street falls with US Treasury yields over 3% – SABC News

US stocks fell on Wednesday as Treasury yields rose above the psychologically important 3% level and oil prices soared, stoking concerns about inflation and the interest rate outlook.

The S&P 500 fell more than 1% during the broad sell-off, snapping a two-day winning streak.

Among the biggest detractors was Intel Corp., which slipped 5.3% after Citi cut its estimates for the chipmaker for the second time in a week.

Noting the uncertainty surrounding PC demand, Citi predicted the company could announce weaker-than-expected second-quarter earnings ahead of time.

Other chip stocks also fell.

Brent crude prices surged above $123 a barrel, hitting a 13-week high, while the Dow Jones transportation average fell 3.8%, well behind other major indices on the day.

The energy sector of the S&P 500 was the only sector to end higher.

“The 10-year Treasury yield is up over 3%. That’s probably one of the reasons we’re seeing the market down today,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

“This is the level people focus on because it represents a rise in interest rates and reflects inflation and market volatility.”

US 10-year benchmark yields rose after the US Treasury saw weak demand for a sale of 10-year notes.

Rising interest rates tend to have a negative impact on stocks.

The Dow Jones Industrial Average fell 269.24 points, or 0.81%, to 32,910.9; the S&P 500 fell 44.91 points, or 1.08%, to 4,115.77; and the Nasdaq Composite fell 88.96 points, or 0.73%, to 12,086.27.

Investors are also cautious ahead of Friday morning’s US consumer price data.

The report is expected to show that inflation remained elevated in May, although core consumer prices – which exclude volatile food and energy sectors – are likely to have fallen on a yearly basis.

The US Federal Reserve is expected to hike interest rates by 50 basis points at each of its June and July meetings, with a similar move likely in September to fight inflation.

Declining issues outweighed increases on the NYSE by a ratio of 2.78 to 1; on the Nasdaq, a 1.33 to 1 ratio favored decliners.

The S&P 500 posted three new 52-week highs and 29 new lows; the Nasdaq Composite posted 36 new highs and 70 new lows.

Volume on US exchanges was 10.62 billion shares, compared to the average of 12.26 billion shares for the entire session over the past 20 trading days.

Wall Street falls with US Treasury yields over 3% – SABC News

Source link Wall Street falls with US Treasury yields over 3% – SABC News

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