
(TheLastPatriotNews.com) – In a striking new event in the stock market, the Dow has plummeted over 600 points, a development connected to rising 10-year Treasury yields, marking a pivotal moment as investors navigate increased borrowing costs and economic concerns.
U.S. stocks suffered their worst day since early August, with the Dow Jones Industrial Average collapsing by 626 points, while the S&P 500 slipped 2.1%, and Nasdaq plunged 3.3%.
Treasury yields conversely reached a three-month high, sparking worry over the global economy.
Investors reeled from new developments, particularly a report indicating that U.S. manufacturing contracted more than expected in August due to high interest rates, CNBC reports.
Adding to investor woes, Big Tech has not escaped unscathed.
Nvidia’s stock fell by 9.5%, contributing significantly to the S&P 500’s decline.
Rate-sensitive megacap stocks, including Nvidia and Apple, saw declines, and concerns surfaced about the overvaluation of these major tech stocks.
McDonald’s also faced a 5% drop due to an E. coli outbreak linked to its Quarter Pounder.
“You also have to balance the fact that the US equity market is expensive on a valuation basis, so we could (be) due for profit-taking,” commented Michael O’Rourke, chief market strategist at JonesTrading, cited by The New York Post.
Treasury yields initially fell when it was reported that U.S. manufacturing contracted again in August.
This leads us into a scenario where the Federal Reserve will likely need to cut interest rates to avoid a recession.
Rate cuts previously aimed to combat inflation but must now address investor apprehension.
However, uncertainty remains, with some suggesting that significant rate cuts from the Fed are unlikely.
“What’s driving things more than anything else is the backup in rates,” commented Thomas Martin, senior portfolio manager, Globalt Investments.
The Dow’s decline marks the third consecutive day of losses for the Dow and S&P 500.
Anxiety about China’s economic resilience has added to global pessimism.
Globally, markets in Europe and Asia have also taken a dive, reflecting broader economic apprehensions.
The bond market saw notable movements as well, with the yield on the 10-year Treasury decreasing somewhat to 3.84% from 3.91%, indicating market volatility.
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