1 hr ago
Bond Yields, Oil Prices Drive Wall Street Sell-Off
U.S. stocks fell on Wednesday after reaching high levels.
The Dow Jones lost about 350 points, while the Nasdaq and S&P 500 also declined.
New reports showed that businesses were growing faster than expected.
Investors worried that strong growth could make inflation harder to control.
Federal Reserve Governor Michael Barr said interest rates might need to rise again.
Higher interest rates can make it more expensive for companies and people to borrow money.
A government bond auction also received weaker demand, pushing bond yields higher.
Oil prices rose, adding another source of concern for investors.
Markets will now watch a planned meeting between Xi Jinping and Donald Trump.
The Dow Jones fell 350 points on Wednesday, September 23, while the S&P 500 declined 0.75% and the Nasdaq lost 1.1%.
Strong September business-activity data increased concerns that the Federal Reserve could raise interest rates again.
Federal Reserve Governor Michael Barr said further policy adjustments may be needed to bring inflation down.
Weak demand at a five-year Treasury auction pushed yields higher, with the note selling at a 5.033% yield.
A rebound in oil prices and concerns about a possible diesel-export ban added pressure to bond yields and stocks.
- Who
- Wall Street investors, the Federal Reserve, Governor Michael Barr, and participants in the Treasury bond market were central to the developments.
- What
- U.S. benchmark stock indexes sold off, with the Dow Jones falling 350 points as bond yields and oil prices rose.
- Where
- U.S. financial markets and the Treasury market; the article also refers to upcoming U.S.-China discussions in Washington.
- When
- Wednesday, September 23.
- Why
- Investors reacted to strong economic data, warnings of possible further rate hikes, weak demand at a five-year Treasury auction, and rising oil prices.
Key facts
- Dow Jones move
- Fell 350 points
- S&P 500 move
- Declined 0.75%
- Nasdaq move
- Declined 1.1% from record-high levels
- 10-year Treasury yield
- Rose to 5.135%, its highest level since July 2007
- September Services PMI
- Rose to 58.7, the highest in five years
- Five-year Treasury auction
- Ended at a 5.033% yield, above the previous six-auction average of 4.186%
- Rate-hike probability
- The probability of a 25-basis-point hike on October 28 rose to 70% from 55.4%, according to CME FedWatch
Sources
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