- Wednesday, October 16, 2024
The U.S. stock market is facing a downward trend this week, undoing the gains made in October. Leading indices such as the Dow Jones Industrial Average (DJIA), S&P 500 (SPX), and Nasdaq Composite (COMP) have all witnessed a decline, propelling them towards a weekly loss. This downtrend stems from rising Treasury yields, which have negatively impacted the market.
Concerns over Interest Rates and Economic Slowdown
Investors experienced a significant setback on Thursday as equities faced pressure from increasing interest rates in the bond market. Their alarm was triggered by Federal Reserve Chair Jerome Powell's recent remarks suggesting the potential need for another rate hike aimed at curbing economic growth and reducing inflation. Consequently, the gains accumulated this month vanished.
According to FactSet data, the Dow has slumped by 1%, the S&P 500 has fallen by 1.2%, and the Nasdaq Composite has dropped by 1.5% so far this month. These figures indicate a downturn in market performance.
High Treasury Yields Spark Concerns
Although the yield on the 10-year Treasury note witnessed a retreat on Friday, it had previously soared to its highest level since July 20, 2007, based on 3 p.m. levels, according to Dow Jones Market Data.
The current situation in the stock market emphasizes the impact of rising Treasury yields on investors' sentiment and reveals their apprehensions regarding economic stability and growth prospects.
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