- Stocks fell on Wednesday ahead of the release of new economic data on growth and inflation.
- The $44 billion seven-year Treasury note auction was hit by weak demand.
- Bond yields rose sharply for a second straight day, with the 10-year note rising 7 basis points to 4.61%.
U.S. stocks fell for the second straight day of a short trading week on Wednesday, with the Dow Jones Industrial Average dropping more than 300 points as Treasury yields continued to surge.
The seven-year Treasury note auction was the third Treasury auction this week to be hit by weak demand, raising concerns about oversupply amid expectations of higher interest rates for a longer period. The Treasury offered $44 billion worth of Treasury notes at 4.650% interest rate, amid reports of weaker than average domestic demand. Tuesday’s two- and five-year Treasury note auctions were priced to factor in weak investor demand.
The 10-year note rose 7 basis points to 4.61%.
The bond market selloff comes ahead of two key data releases for investors trying to gauge interest rate trends for the rest of the year. On Thursday, first-quarter GDP was revised for the first time, showing growth in the first three months of the year is expected to be slower than initially reported.
More importantly, on Friday the Bureau of Economic Analysis will release the Federal Reserve’s preferred inflation gauge. Economists estimate that inflation, as measured by personal consumption expenditures, will rise 2.7%, in line with March’s reading. But any surprises, either above or below expectations, could have a major impact on stocks and the broader market.
The Nasdaq Composite Index fell further from a record high hit on Tuesday, but the tech-heavy index avoided a bigger drop thanks to Nvidia, which rose almost 1% during trading hours.
As of the close of trading at 4pm on Wednesday, U.S. stock indexes were as follows:
Here’s something else that happened today:
Commodities, Bonds and Cryptocurrencies:
- West Texas Intermediate crude fell 1% to $79.85 a barrel, while the international benchmark Brent crude dropped 0.9% to $83.41 a barrel.
- Gold fell 0.8% to $2,336.20 an ounce.
- The yield on the 10-year Treasury note rose 7 basis points to 4.614%.
- Bitcoin fell 1.6% to $67,286.78.
