Stocks Fall on Wall Street as Bond Market Pressure Rises

NEW YORK — Stocks fell on Wall Street as the pressure cranked higher from the bond market again. The S&P 500 lost 0.8% Thursday. The Dow fell 220 points, and the Nasdaq composite gave back 0.9%. Stocks had been higher earlier in the day, but the market quickly sagged under the weight of rising bond yields. Yields rose after the government announced the results of a sale of 30-year Treasury bonds.

Yields rose in the morning after a report suggested the U.S. job market remains remarkably solid. They climbed further in the early afternoon when the U.S. government announced the results of a sale of $24 billion in Treasury bonds maturing in 30 years. And they spurted even higher after Federal Reserve Chair Jerome Powell said the Fed “will not hesitate” to raise interest rates further if it feels high inflation is not fully under control.

A swift rise in the 10-year yield that began in the summer earlier knocked the S&P 500 down by more than 10% from its peak for the year. The yield briefly topped 5% to reach its highest level since 2007, as it caught up with the Federal Reserve’s main interest rate, which is above 5.25% and at its highest level since 2001.

That cooled some of the enthusiasm that had built on Wall Street as traders moved up their forecasts for when the Federal Reserve could begin cutting rates. Many are betting on rate cuts to begin by summer, according to data from CME Group. Earlier, Mericle thought the Fed could bring it down as low as 3% to 3.25%, but he said the U.S. government’s big, persistent deficits and other factors will likely keep rates higher.

Tapestry climbed 4% for another one of the bigger gains in the S&P 500 after the maker of high-end shoes and handbags beat Wall Street’s profit forecast

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