Rising Treasury yields tend to undermine the performance of stocks, with higher rates on government debt offering a more attractive opportunity for investors. Or so the convention thinking goes.
Moya’s view captures a period beyond Thursday’s up-and-down session. All three major stock indexes initially rallied from the open in reaction to another round of record earnings and blowout forecasts from Nvidia on Wednesday, even though 3-month BX:TMUBMUSD03M through 30-year yields BX:TMUBMUSD30Y were all higher. As trading wore on, however, the Nvidia-spawned euphoria faded as higher yields and a rising dollar DXY put pressure on equities, with all three major indexes ending sharply lower.
Read: Will Powell crush stocks again during Friday’s Jackson Hole speech? Here’s one reason investors shouldn’t worry. Dow industrials DJIA and the S&P 500 SPX are off their record closes reached in January 2022 by 7.3% and 8.8%, respectively, according to Thursday figures from Dow Jones Market Data. The Nasdaq Composite COMP is down by 16% from its record close in November 2021. Nvidia shares finished 0.1% higher on Thursday at $471.74.
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