NEW YORK (dpa-AFX) – On the US stock market, investors continue to watch the development of yields on US government bonds and remain cautious. Technology stocks in particular were under pressure again on Thursday, but the broader market also went a little further downwards. The best-known index, the Dow Jones Industrial, again failed to find a clear direction in early business. After a friendly start, it recently fell by 0.21 percent to 31,205.37 points.
After the effective interest rate for ten-year US Treasuries had risen to 1.47 percent the day before, it remained there on this trading day. Last week it had reached its highest level in a year at around 1.55 percent. Rising growth and inflation expectations are considered to be the trigger for the rise in yields. This is a danger for equity investors, as bonds become more interesting as an investment alternative as interest rates rise. Refinancing can also become more expensive for companies.
The market-wide S&P 500 fell 0.65 percent to 3794.71 points and the Nasdaq 100 lost 1.12 percent to 12 540.67 points.
Before US Federal Reserve Chairman Jerome Powell will speak out in a few hours, mixed economic data were in view. On the one hand, slightly more people applied for unemployment benefits in the past week than in the previous week. On the other hand, productivity in the US economy fell less markedly than expected in the fourth quarter of 2020.
On Powell, analysts also said that his speech that day would be his last chance to comment on bond market developments before a two-week standstill period began over the weekend before the next meeting of the Federal Reserve Open Market Committee. This committee makes important monetary policy decisions such as setting the key interest rate./ck/he
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