World News | US Stocks Fall Sharply as Markets Deal with Higher Rates
Get latest articles and stories on World at LatestLY. Stocks fell sharply in morning trading on Wall Street Thursday as bond yields marched higher and put the squeeze back on markets.
New York, Sep 29 (AP) Stocks fell sharply in morning trading on Wall Street Thursday as bond yields marched higher and put the squeeze back on markets.
The S and P 500 fell 2.6 per cent as of 10.15 am eastern. Nearly every stock in the benchmark index lost ground.
The Dow Jones Industrial Average fell 597 points, or 2 per cent, to 29,074 and the Nasdaq fell 3.3 per cent.
A day before, stocks jumped and bond yields tumbled in relief after the Bank of England moved forcefully to keep borrowing rates there from spiking further.
Wall Street still remains focused on the Federal Reserve and its aggressive rate hikes aimed at slowing the economy and cooling the hottest inflation in four decades.
Bond yields jumped. The yield on the 2-year Treasury, which tends to follow expectations for Federal Reserve action, fell to 4.23 per cent from 4.14 per cent late on Wednesday.
It is trading at its highest level since 2007. The yield on the 10-year Treasury, which influences mortgage rates, rose to 3.80 per cent from 3.73 per cent.
A better-than-expected government report on US layoffs only bolstered expectations that the Fed will keep hiking interest rates and investors are worried that it could hit the brakes on the economy too hard and cause a recession.
The US economy has already contracted for two consecutive quarters, which is one informal measure of a recession. But, the employment market remains strong and consumers continue spending.
That has helped bolster the economy and is making it more difficult to get inflation under control. (AP)
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)