Bonds Take a Beating as Investors Fear Rising Rates Again Stocks Slump in Afternoon as Nasdaq Leads Declines. Stocks were mostly flat through midday on Thursday, but selling picked up in the afternoon, with the Nasdaq leading the declines. The Nasdaq Composite fell 1.2%, while the S&P 500 fell 0.8% and the Dow Jones Industrial Average fell 0.6%.
The sell-off was broad-based, with all sectors of the market declining. The energy sector was the biggest loser, falling 2.3%, followed by the technology sector, which fell 1.8%.
The decline in stocks came as investors continued to worry about rising inflation and interest rates. The Federal Reserve is expected to raise interest rates several times this year in an effort to combat inflation, which could weigh on economic growth.
Fixed income was also under pressure, with the yield on the 10-year Treasury note rising 10 basis points to 3.20%. The dollar was stronger against a basket of currencies.
The metals were mixed, with silver gaining 1% and gold losing a few dollars. The miners were mixed with small changes.
While there isn't much more to elaborate on at this juncture, it's worth highlighting that the gradual downturn in equities appears largely influenced by the ongoing descent of Treasuries. It's reasonable to anticipate a time when the equity market must align itself with the prevailing negative fundamentals. Bonds and our currency might bear the brunt of the deficit's impact, although one could argue that the bond market has already experienced such effects to a certain extent; it's just that the rise in rates hasn't been directly attributed to it.
Undoubtedly, a multitude of pressing issues remains disregarded in the foreground, and it wouldn't necessitate a significant shift for these dots to be connected, causing complacency to swiftly transform into fear.