Stocks sink most in six months after recent runup in treasury yields

A bad week on Wall Street turned dismal Thursday after the relentless surge in Treasury yields sapped demand for risk assets. In the end, US stocks suffered the biggest drop in six months as investors recalibrate for a world where rates sit at levels not seen in a generation.

In what’s increasingly looking like bad timing, investors plowed $26.4 billion into US equities in the week ended Sept. 13, the most since March 2022, with about $1.3 billion funneling into the tech sector, according to EPFR Global data cited by Bank of America Corp. The Nasdaq 100 Index, which had its best first half on record, has slumped more than 5% this month.

Their argument is that prior runups in yields during the Fed’s tightening cycle have invariably been short-lived. Every time the 10-year yield has climbed above 4% in the past year, it’s retreated back below 3.5% in short order.

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