Stocks Drop as Bond Yields Jump
U.S. stocks are trading lower Thursday as bond yields rise. The yield on the 10-year U.S. Treasury note rose 4.4 basis points to 3.20%, touching its highest level since 2011. This also comes just a day after its biggest one-session increase since November of 2016. Traders may be dumping bonds after economic reports indicate continued strength in the U.S. economy. Higher yields have the potential to dampen enthusiasm for stocks, as it can offer reliable income without the risk or volatility that commonly comes with equities. Initial jobless claims fell by 8,000 in the latest period and are coming near multidecade lows. The report came just after yesterday’s strong private-sector employment number, and a day before the September jobs report.
In other markets, crude oil prices have sold off sharply from a four-year-high reached yesterday, while gold & the U.S. Dollar have remained relatively unchanged.