Stocks declined on Monday as investors awaited the announcement of corporate earnings from major players in the IT sector and Treasury yields increased.
Losing 133 points, or 0.4%, the Dow Jones Industrial Average. Along with the Nasdaq Composite, the S&P 500 fell 0.4%.
The yield on the standard 10-year Treasury note momentarily reclaimed the crucial 5% threshold. The price was recently trading just below that level.
The 10-year broke above 5% on Thursday, the first time the benchmark has done so since July 2007 as a result of the recent spike in interest rates. Treasury yields increased as a result of remarks made by Federal Reserve head Jerome Powell suggesting monetary policy may become even tighter.
A crucial milestone for Wall Street is 5% on the 10-year Treasury. This level is a clear indication that investors may be losing hope that the Fed would decrease interest rates soon, which would put pressure on the stock market. The benchmark yield, according to some analysts, may still have some opportunity to grow.
According to Canaccord Genuity Group chief market analyst Tony Dwyer in a report published on Monday, the sharp increase in yields “could worsen an already declining economic picture that is concealed by higher rates.”
Source (CNBC)