As Treasury yields rose to their highest levels since 2007, investors are concerned that rising interest rates would cause the property market to freeze and push the economy into a recession. This contributed to a decline in stocks on Tuesday.
This was the worst day for the Dow Jones Industrial Average since March as it dropped 430 points, or 1.3%. In the course of the session, the S&P 500 dropped 1.4% and hit its lowest point since June. The growth companies suffered some of the greatest losses as a result of the increase in rates, contributing to the 1.9% decline in the tech-heavy Nasdaq Composite.
The Dow lost on Tuesday, dropping 0.4% to end the year in the negative. Even for 2023, the S&P 500 index as a whole is up 10%.
The 10-year Treasury yield last traded at 4.81%, hitting its highest level in 16 years. The benchmark yield has increased over the past month as a result of the Federal Reserve’s promise to maintain higher interest rates for a longer period of time. The 30-year Treasury yield increased to 4.947%, which is also the highest level since 2007. A 30-year fixed-rate mortgage had an average rate that was very close to 8%.
Source (CNBC)