Stocks hit biggest decline since June

U.S. stocks fell the most since June and volatility spiked higher as the rout in Treasuries that took yields to multiyear highs fueled a repricing of risk assets.

The S&P 500 dropped to a three-week low, with nine of the 11 main sectors retreating. High-dividendyielding stocks dropped after the 10-year yield poked above 3.2 percent for the first time in seven years. Technology shares fell the most, with the Nasdaq 100 Index notching its worst day since June following Bloomberg’s report that China infiltrated American companies with hardware hacks. Higher rates lifted financial firms.

The bond rout rippled through global financial markets even as Treasuries stabilized Thursday. Emerging-market shares sank the most since February, European government bonds fell and commodities from crude to copper tumbled. The Turkish lira led developing-nation currencies lower, closely followed by Russia’s ruble.

“This withdrawal of liquidity and gradual tightening of monetary policy” is reverberating across financial markets, Bob Baur, chief global economist at Principal Global Investors, said in an interview with Bloomberg Television. “We look for 10-year Treasury yields to hit 3.5 at some point — later this year, early next year — and I think that’s going to be a real problem for stock markets.”

Data underscoring the strength of the American economy sparked the Treasury selloff, sending yields higher fast enough to spook equity investors who had pushed stocks toward records on the heels of the new Nafta agreement. Fed Chairman Jerome Powell stoked rate worries when he said the central bank could eventually boost its benchmark past the neutral level.

Adding to the rising risk sentiment were growing signs of strain in U.S.China relations that could exacerbate the trade war.