As bond yields rise again, stock markets slow down

Technology companies led another broad sell-off on Wall Street on Thursday as a spike in bond yields put more pressure on the market’s high-flying stocks.

The S&P 500 fell 1.3%, its third straight loss. The benchmark index, which briefly dipped into the red for the year, is on track for its third consecutive weekly loss. Just four days ago it notched its biggest gain since June. That market rally was driven by what now appears to be a brief pause in the recent, swift rise in bond yields, which in turn pushes up interest rates on loans for consumers and businesses.

The latest losses came as the yield on the 10-year Treasury rose sharply.

The S&P 500 fell 51.25 points to 3,768.47. The Dow Jones Industrial Average lost 345.95 points, or 1.1%, to 30,924.14.

The Nasdaq composite dropped 274.28 points, or 2.1%, to 12,723.47. The pullback knocked the tech-heavy index into the red for the year.

Small-company stocks fell more. The Russell 2000 index of smaller companies gave up 60.87 points, or 2.8%, to 2,146.92.

The yield on the 10-year Treasury note jumped to 1.54% during Powell’s remarks, from 1.47% just before, a significant move. At the beginning of the year the yield was trading at 0.93%.

Investors have been keeping a close eye on the bond market in recent weeks, where yields have been rising along with expectations that the economy, and possibly inflation, could be set to pick up as vaccinations increase and coronavirus restrictions on businesses, travel and schooling begin to lift more.

The price of U.S. crude oil jumped 4.2% after OPEC members agreed to leave most of their existing oil production cuts in place. That helped send energy company stocks broadly higher. Exxon Mobil rose 3.9% and ConocoPhillips rose 3.7%.