Advertisement
Canada markets closed
  • S&P/TSX

    24,471.17
    +168.91 (+0.70%)
     
  • S&P 500

    5,815.03
    +34.98 (+0.61%)
     
  • DOW

    42,863.86
    +409.74 (+0.97%)
     
  • CAD/USD

    0.7270
    -0.0008 (-0.11%)
     
  • CRUDE OIL

    75.49
    -0.36 (-0.47%)
     
  • Bitcoin CAD

    86,468.86
    +3,709.79 (+4.48%)
     
  • XRP CAD

    0.74
    +0.01 (+0.79%)
     
  • GOLD FUTURES

    2,674.20
    +34.90 (+1.32%)
     
  • RUSSELL 2000

    2,234.41
    +45.99 (+2.10%)
     
  • 10-Yr Bond

    4.0730
    -0.0230 (-0.56%)
     
  • NASDAQ

    18,342.94
    +60.89 (+0.33%)
     
  • VOLATILITY

    20.46
    -0.47 (-2.25%)
     
  • FTSE

    8,253.65
    +15.92 (+0.19%)
     
  • NIKKEI 225

    39,605.80
    +224.91 (+0.57%)
     
  • CAD/EUR

    0.6642
    -0.0011 (-0.17%)
     

US stocks drop after Treasury yields once again surge to a new cycle high

nyse trader hand on face
A trader at the New York Stock Exchange puts his hand on his face in September 2008.Richard Drew/AP
  • US stocks dropped on Tuesday after Treasury yields once again hit a new cycle high.

  • The 10-year yield jumped to a high of 4.75%, which is well above the 3.64% level it was at a year ago.

  • Higher bond yields have led to increased competition for stocks as investors can grab a risk-free yield of 5%.


US stocks fell on Tuesday after interest rates surged to a new cycle high, with the 10-year Treasury yield jumping to 4.75%, the highest since August 2007.

The latest surge comes a day after Cleveland Fed President Loretta Mester said that one more rate hike might be necessary later this year. The market currently expects no hikes at the Fed's upcoming November and December meetings, so any further increases would be a surprise to investors.

"I suspect we may well need to raise the fed funds rate once more this year and then hold it there for some time as we accumulate more information on economic developments and assess the effects of the tightening in financial conditions that has already occurred," she told a group of business leaders on Monday.

Mester, who is not a voting member of the Fed this year, said inflation is still too high and risks related to persistently high inflation remain skewed to the upside.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Tuesday: 

Here's what else is going on today: 

In commodities, bonds, and crypto: 

  • West Texas Intermediate crude oil rose 0.46% to $89.23 a barrel. Brent crude, the international benchmark, gained 0.11% to $90.81 a barrel.

  • Gold fell 0.34% to $1,840.90 per ounce.

  • The yield on the 10-year Treasury bond jumped six basis points to 4.75%.

  • Bitcoin edged up 0.08% to $27,529.

Read the original article on Business Insider