The US Dow Jones Index recorded a decline of about 200 points after 10-year bond yields rose by more than 5 percent for the first time since 2007.
The yield on the benchmark 10-year Treasury note exceeded 5 percent for the first time in 16 years on Thursday, a level that could impact the economy by increasing interest on mortgages, credit cards, car loans and more.
The high yield on Treasury bonds also provides investors with a more attractive alternative to stocks.
“The stock market is watching the bond market and doesn’t like what it sees,” said David Donabedian, chief investment officer at CIBC Private Wealth Management.
He added: “Yields are rising, even with relatively good news on inflation. This is the main reason behind the weak stock market.”
By 16:00 GMT, the Dow Jones index fell by 0.43 percent to 33,266 points, the Nasdaq index fell by 1.19 percent to 13,029.64 points, and the Standard & Poor’s 500 index fell by 0.84 percent to the level of 4,240.82 points.
2023-10-20 16:09:15
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