FILE - A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, on Oct. 18, 2023. Asian shares retreated Friday, Oct. 20 as the prospect of a 5% yield on the 10-year U.S. Treasury for the first time since 2007 added to pressure on Wall Street. FILE - A currency trader watches monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, on Oct. 11, 2023.
China announced on Friday it was keeping its benchmark lending rates unchanged, with the one-year loan prime rate unchanged at 3.45% and the five-year LPR at 4.20%, in line with market expectations. On Thursday, the S&P 500 fell 0.8%, to 4,278.00, following a mixed set of profit reports from Tesla and other influential companies. The Dow Jones Industrial Average dropped 0.7% to 33,414.17 and the Nasdaq composite sank 1% to 13,186.18.
Fed Chair Jerome Powell said in a speech Thursday that the Fed could raise interest rates again if U.S. economic growth appears persistently strong. The Fed has raised rates to their highest level since 2001 hoping to curb price pressures by getting businesses and consumers to spend less. A higher 10-year yield makes mortgages more expensive, knocks down prices for investments and makes it costlier for companies to borrow and grow.
High yields hurt all kinds of stocks, but especially those bought on expectations for big growth far into the future. That’s often put the spotlight on Big Tech recently.
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