US stocks plunged on Tuesday after bond yields surged to a new cycle-high not seen since 2007.
Higher interest rates have upended investors appetite for risk as cash yields hit more than 5%.
The 10-year US Treasury Yield jumped above 4.80%, compared to the 3.64% level it was a year ago.
US stocks plunged on Tuesday as interest rates surged to a new cycle-high, hitting levels not seen since August 2007.
The 10-Year US Treasury yield jumped above 4.80%, well above the 3.64% level it was at about a year ago. The surge in bond yields accelerated after weekly job openings data came in ahead of expectations, showing that the labor market remains resilient.
A still-hot jobs market could push the Federal Reserve to continue with its interest rate hikes in its ongoing bid to tame inflation. Cleveland Fed President Loretta Mester said that one more rate hike might be necessary later this year, which is something that the market is currently not anticipating.
“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,” Mester said to a group of business leaders on Monday.
Here’s where US indexes stood at the 4:00 p.m. closing bell on Tuesday:
Here’s what else happened today:
In commodities, bonds, and crypto:
West Texas Intermediate crude oil rose 0.77% to $89.50 a barrel. Brent crude, the international benchmark, gained 0.43% to $91.10 a barrel.
Gold fell 0.37% to $1,840.30 per ounce.
The yield on the 10-year Treasury bond jumped 11 basis points to 4.80%.
Bitcoin fell 0.80% to $27,287.
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