US stocks sink as 10-year yield jumps to 7-year high
|Major US equity indices sank during the opening hour of trade on Tuesday, with the blue-chip Dow Jones Industrial Average (DJIA) ending eight consecutive days of winning streak.
Tuesday’s early pressures came amid a strong follow-through upsurge in the US Treasury bond yields, with the 10-year note shooting above the psychologically important 3% level to hit its highest level since 2011.
On the economic data front, the release of better-than-expected Empire State manufacturing index and second straight month of growth in monthly retail sales suggested that the economy is picking up pace after a slow start to the year.
Improving economic indicators now seems to have revived expectations that the Fed might need to raise interest rates more aggressively and was eventually seen driving flows away from perceived riskier assets - like equities.
Against the backdrop of recent geopolitical tensions, traders also seemed disheartened over lack of progress from the latest round of US-China trade talks, which further collaborated towards souring the mood on Tuesday.
At the time of writing this report, the DJIA lost nearly 200-points to 24,703 and the broader S&P 500 Index was down over 20-points to 2,708. Meanwhile, tech-heavy Nasdaq Composite Index underperformed the broader indices and sank over 1%, or 76-points, to 7,335.
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