US stocks waded in the red on Wednesday, after a spike in Treasury yields unsettled investors already weighing whether recent data will shift the needle on interest rates.
The benchmark S&P 500 (^GSPC) fell more than 0.7%, while the Dow Jones Industrial Average (^DJI) drifted about 1% lower, shedding over 400 points and leading the indexes down. The Nasdaq Composite (^IXIC) declined about 0.6%.
Stocks are sliding as investors contemplate a jump in US bond yields after a government debt auction flopped, reflecting worries that the Federal Reserve will keep rates higher for longer.
The yield on 5-year Treasurys rose to near four-week highs this week. The 10-year yield (^TNX) is back above the key 4.5% level, trading around 4.62% Wednesday, its highest level since early May.
Those concerns appeared to be eclipsing the hopes for AI growth that lifted the Nasdaq to a record in the slipstream of Nvidia’s (NVDA) post-earnings rally. Nvidia stock rose for a fourth straight day on Wednesday to close at a record high.
Investors are also trying to puzzle out what Tuesday’s stronger-than-expected consumer confidence print means for Fed policymaking, but they are braced for a long wait for a pivot to rate cuts after a litany of warnings from its officials.
