Stocks Slip as Bond Market Pressure Mounts on Inflation Fears
A strong economic report sparked concerns about inflation, leading to a drop in major U.S. stock indexes and a rise in Treasury yields.
U.S. stocks declined on Wednesday as pressure from the bond market intensified following a robust economic report that fueled inflation worries. The S&P 500 fell 0.8%, the Dow Jones Industrial Average dropped 0.7%, and the Nasdaq composite lost 1.1% from its record high.
The yield on the 10-year Treasury note climbed to 5.11%, reaching levels not seen since 2007. This movement was influenced by a report indicating that both business activity and costs in the U.S. are increasing at their fastest pace in years.
On Wednesday, the S&P 500 closed down 58.61 points at 7,706.03. The Dow Jones Industrial Average shed 352.10 points to finish at 51,511.59. The Nasdaq composite lost 308.24 points, ending the day at 26,936.04. The Russell 2000 index, which tracks smaller companies, saw a more significant decline, falling 1.8% to 2,838.66.
Despite Wednesday's losses, major indexes have shown gains for the week and the year. For the week, the S&P 500 is up 0.7%, and the Nasdaq has risen 1.6%. The Dow Jones Industrial Average is down 0.3% for the week.
Year-to-date, the S&P 500 has gained 12.6%, the Dow is up 7.2%, the Nasdaq has advanced 15.9%, and the Russell 2000 has increased 14.4%.