After charging higher much of the year, U.S. stocks have lost roughly 40% of their value since the end of July.The Standard & Poor’s 500 was 0.5% lower in early trading and back to where it was in June. The Dow Jones industrial average was down 157 points, or 0.5%, at 33,275, as of 9:37 a.m. Eastern, and the Nasdaq composite was 0.5% lower.
The 10-year Treasury yield climbed again Tuesday, up to 4.71% from 4.69% late Monday and from just 0.50% early in the pandemic. It’s near its highest level since 2007.When bonds are paying so much more in interest, they pull investment dollars away from stocks and other investments prone to bigger swings in price than bonds. High yields also make borrowing more expensive for companies and households across theOct.
Fed Gov. Michelle Bowman said in a speech Monday that she expects it to be likely appropriate “to raise rates further and hold them at a restrictive level for some time.” Restrictive is what Fed officials call high-enough rates to slow the overall economy.could drag on spending by U.S. households, which has been strong enough to help keep the economy out of a recession despite high interest rates. Higher oil prices are threatening to worsen inflation, and economies around the world look shaky.
Markets in mainland China and South Korea remained closed for holidays, while Japan’s Nikkei 225 index fell 1.6%. Stocks were also lower across much of Europe.
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