U.S. stocks had a significant drop in the final hour of trading on Tuesday as Treasury rates reached their highest levels since the second half of 2007. The Dow Jones Industrial Average fell by 489 points, or 1.5%, and the S&P 500 was down by 65 points, or 1.5%. Meanwhile, the Nasdaq Composite recorded a decline of 272 points, or 2.1%, marking its worst one day performance since August 2, 2023.
An indicator of the market’s health, only 8% of stocks listed on the S&P 500 are expected to close the day above their 50-day moving average. This would represent the lowest percentage of stocks meeting this criteria throughout the year.
The surge in Treasury rates has caused investor concerns, leading to the decline in stock prices. Treasury rates serve as a benchmark for borrowing costs throughout various financial markets, and their increase can directly impact borrowing costs for businesses and consumers. The rise in rates may have a ripple effect on various sectors of the economy, potentially slowing down economic growth.
It is important to note that this sharp decline comes after a period of significant gains in the stock market. Despite the current drop, the overall trend for stocks in recent years has been positive.
Sources:
– Frances Yue, MarketWatch
– Dow Jones Newswires
– The Wall Street Journal