Wall Street slumped Thursday as it faced the prospect of a 5% yield on the 10-year Treasury for the first time since 2007.
- The Dow fell 250 points, or 0.7%, to 33,414.
- The S&P 500 fell 36 points, or 0.8%, to 4,278.
- The Nasdaq fell 128 points, or 0.9%, to 13,186.
Stocks were feeling pressure from the bond market, where rising yields have been squeezing Wall Street since the summer. The yield on the 10-year Treasury touched 4.99% for the first time since 2007, up from 4.91% late Wednesday, before paring its gain to 4.97%. As the reference point for much of the financial world, the 10-year yield helps set prices for all kinds of investments and loans. Yields swung after Federal Reserve chief Jerome Powell said again that the central bank will watch how the economy and inflation trend before making upcoming decisions on interest rates. It's already pulled its main overnight interest rate to the highest level since 2001, and the 10-year Treasury yield has been catching up.
The 10-year yield has been on a mostly steady march from less than 3.5% during the spring as a resilient US economy forces investors to accept a new normal where the Fed likely keeps its main interest rate high for a long time. In the markets, Tesla fell 10.3% after it reported weaker results for the summer than analysts expected. Zions Bancorp. tumbled 9.3% even though it also reported stronger profit than expected for the latest quarter. On the opposite end was Netflix, which jumped 16.6% after it reported stronger profit than expected, and said it would raise prices on some of its membership levels to drive more revenue.
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