Stock market today: Stocks slump worldwide as allure grows to buy a Treasury bill and chill
Wall Street is slumping again as stock prices fall worldwide on expectations that U.S. interest rates will stay high well into next year
NEW YORK — Wall Street is slumping again Thursday as stock prices drop worldwide on expectations that U.S. interest rates will stay high well into next year.
The S&P 500 was 1% lower in afternoon trading. That follows a similar drop from Wednesday after the Federal Reserve indicated it may cut interest rates next year by just half what it earlier predicted. The Fed has already hiked its main interest rate to levels unseen since 2001, which helps slow inflation but at the cost of hurting investment prices.
Big Tech stocks again took the brunt of the pain because they’re typically among the biggest victims of high rates. The Nasdaq composite was 1.1% lower, as of 1:58 p.m. Eastern time, as Amazon fell 3.3% and Nvidia dropped 1.8%. The Dow Jones Industrial Average was down 162 points, or 0.5%.
Stock prices tend to fall when rates rise because stocks are historically risky investments. Why stomach the chance of their big swings when Treasurys are paying more in interest than before? And they’re paying much more.
A 10-year Treasury yield is offering a yield of 4.47%, up from 4.40% late Wednesday and from only 0.50% three years ago. It’s near its highest level since 2007.
The two-year Treasury yield, meanwhile, was wavering following mixed reports on the economy. It slipped to 5.14% from 5.17% late Wednesday after climbing earlier in the morning.
One report showed fewer U.S. workers applied for unemployment benefits last week than expected. It was the lowest number since January and the latest signal of a remarkably resilient job market.
Such a solid labor market helps calm worries about a
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