1 hr ago
US Stocks Fall as Treasury Yields Hit Highest Since 2007
US stocks fell because government bond interest rates jumped.
The 10-year Treasury yield reached its highest level since 2007.
A report showed that US businesses were growing quickly in September.
Investors worried that strong growth could keep inflation high.
That made traders expect the Federal Reserve might raise interest rates again.
Higher rates can make it more expensive for companies to borrow money.
They can also make bonds more attractive than stocks.
Tensions between the United States and Iran added to investor worries.
Oil prices rose, while the dollar gained and gold declined.
The S&P 500 fell 0.75%, the Dow dropped 0.68%, and the Nasdaq declined 1.13%.
The benchmark 10-year Treasury yield rose 13.89 basis points to 5.106%, its highest level since 2007.
S&P Global’s flash US Composite PMI Output Index climbed to 58.4 in September, signaling strong business activity and new orders.
Traders raised the estimated probability of an October Federal Reserve rate hike to 66% from 53% earlier in the day.
Oil prices rose amid renewed US-Iran tensions, while the dollar strengthened and gold prices fell.
- Who
- US investors, the Federal Reserve, US businesses, and officials from the United States and Iran were central to the report.
- What
- US stocks declined as Treasury yields rose sharply and investors increased expectations for another Federal Reserve rate hike.
- Where
- US financial markets, with effects across European and global markets; geopolitical comments were made at the United Nations General Assembly.
- When
- Wednesday, September 23; the article does not specify a year.
- Why
- Strong business activity raised concerns about inflation, while comments on US-Iran tensions added to market uncertainty.
Continued Diplomacy
Maximum Pressure
Approach to the US-Iran conflict
Continued Diplomacy
A senior Iranian official said diplomacy must continue even though the United States and Iran remain divided over how to end the war.
Maximum Pressure
President Donald Trump threatened to “annihilate” Iran, while also saying his envoys had held productive talks with mediators.
Meaning of strong economic growth
Continued Diplomacy
Strong business activity can be viewed as evidence that the US economy remains resilient.
Maximum Pressure
Market analysts said the strength may indicate the economy is overheating and adding to inflationary pressure, potentially requiring further rate hikes.
Key facts
- 10-year Treasury yield
- Rose 13.89 basis points to 5.106%, the highest since 2007.
- 2-year Treasury yield
- Rose 11.4 basis points to 4.891%, after reaching 4.947%.
- US Composite PMI
- S&P Global’s flash index rose to 58.4, its highest level since July 2021.
- October rate-hike probability
- Fed funds futures priced in a 66% chance, up from 53% earlier in the day.
- Major stock indexes
- The Dow fell 0.68%, the S&P 500 dropped 0.75%, and the Nasdaq declined 1.13%.
- Five-year Treasury auction
- A $70 billion auction drew very weak demand and produced its highest auction yield since 2007.
- Oil prices
- US crude rose 2.3% to $92.60 per barrel, while Brent rose 4.28% to $103.50.
Quotes
Will Compernolle
Macro strategist at FHN Financial
“It looks like for now the technical boundaries that had kept a lid on yields for the last few weeks are just broken, and once this momentum starts it can make traders very hesitant to step in front of it,””
livemint.com
“They're painting a picture of the economy not just being resilient, but overheating, and in that sense, robust economic growth is no longer balanced, it's adding to inflationary pressures.””
livemint.com
Sources
Related news
U.S. 10-Year Treasury Yield Briefly Tops Key 5% Level
US 10-Year Treasury Yield Reaches 5% Ahead of Fed Decision
Thirty-Year US Treasury Yield Hits 5.34% as Oil Stokes Inflation
US 10-Year Treasury Yield Hits Highest Level Since 2007
Fed Rate Hike Leaves Treasury Yields Elevated Amid Inflation
China Holding Sensitive F-35 Parts Ahead of Trump-Xi Meeting
Graphite, Not Lithium, Emerges as Battery Industry's Biggest Choke Point
AI Leaders Warn UN of Security Risks and Controls
Trump Welcomes Xi at Airport as High-Stakes Summit Begins
