17 August 2023

Markets today: Markets Fizzled. Bond Yields Were a Drag. | BARRON'S FINANCIAL

 

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Aug. 17, 2023 at 4:46 PM EDT

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Stocks dropped and ended in the red Thursday as higher bond yields weighed on the market. The 10-year Treasury yield was on pace to hit its highest point since 2007.

In economic news, mortgage rates marked a two-decade high, and initial jobless claims fell more than expected, showing the U.S. labor market remains tight.

CVS was the worst performer in the S&P 500, after Blue Shield of California announced it was dropping its pharmacy-benefit manager.

After the bell, more earnings are on tap from Applied Materials and Ross.

Key Events

Stock Market Today: Dow, S&P 500 Fizzle Out; Walmart Earnings; CVS, Hawaiin  Electric and Other Movers; More China News

Stock Market Today: Dow, S&P 500 Fizzle Out; Walmart Earnings; CVS, Hawaiin Electric and Other Movers; More


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What started off as a solid day for the stock market ended with another decline as higher bond yields weighed on equities.

The S&P 500 fell 0.8%, while the Dow Jones Industrial Average dropped 292 points, or 0.8%, and the Nasdaq Composite slumped 1.2%. The decline in stocks came as the 10-year Treasury rose to 0.049 percentage point to 4.307%, its highest since November 2007.

The rise in Treasury yields is demonstrating that stock market bulls and bears may both be wrong—at least about where the economy is heading next and the next moves from the Federal Reserve.

Per Navellier & Associates’ Louis Navellier, bulls have been expecting inflation to keep falling and for the Fed to start cutting rates by the end of this year. Bears, meanwhile, expected a recession to send bond yields lower.

1 hour ago

10-Year Bonds Yields Are Highest Since 2007. They Could Keep Going.

10-Year Bonds Yields Are Highest Since 2007. They Could Keep Going.

The yield on 10-year Treasury notes hit 4.32% on Thursday as investors digested the possibilit inflation will remain above the Fed's target of 2%.

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