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Over 400 Points are Lost by the Dow Tuesday, Following a Surge in Interest Rates, and Declining for 2023

Concerns that rising interest rates will freeze the housing market and send the economy into a recession caused stocks to drop on Tuesday as Treasury yields rose to their highest levels since 2007.

In its biggest drop since March, the Dow Jones Industrial Average dropped 471 points, or 1.4%. The S&P 500 dropped 1.4%, reaching its lowest point since June. As growth companies suffered some of the greatest losses as a result of the increase in rates, the tech-heavy Nasdaq Composite fell 1.8%.

The Dow now has a negative yearly return after Tuesday’s losses. For 2023, the S&P 500 index as a whole is still up 10%.

At its highest point in 16 years, the 10-year Treasury yield recently traded at 4.802%. As the Federal Reserve promised to maintain higher interest rates for a longer period of time, the benchmark yield has increased during the past month. Also reaching its highest level since 2007, the 30-year Treasury yield increased to 4.941%. A 30-year fixed mortgage’s typical rate was close to 8%.

Source (CNBC)

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