Dow Jones Loses 400 Points as Treasury Yields Climb
The Dow Jones fell 1.1% with a loss of 400 points today, followed by similar drops from the Nasdaq Composite and the S&P 500.
For Monday, the S&P 500 is down 0.8%, and the Nasdaq Composite fell 1.1%. The drop could be due to treasury note yields moving higher as a result of the Federal Reserve deciding to wait on interest rate cuts.
An announcement from Federal Reserve chairman Jerome Powell last week stated that there were unlikely to be any interest rate cuts for the US banks in March. The next possible date for cuts would then be in November.
The big news on stocks was McDonalds falling 4% after the company posted mixed results for the previous financial quarter. Meta Platforms and Microsoft did well, though, with Microsoft gaining for most of January. It is down slightly today but still well above where it was for much of the month. Meta Platforms is down 2.91% today, but that hardly matters with its 14% gain over the last five days.
Good News for the Market
The three major averages have risen over the past 14 weeks almost consistently. They were only down for one week out of that period, marking strong performances and better than expected gains. This is evidence of economic recovery for the US stock market and could point toward a very good 2024.
Even though all three average reported drops today, they have not fallen below the gains they made in the previous week. We expect to see the markets rebound quickly and continue to perform well throughout the week.
One bit of news that could disturb the market, though, is the military action going on in the Middle East. The US started striking targets by air in both Iraq and Syria on Friday. Retaliation began today from a group in Iraq that is actually backed by Iran. If the US becomes more heavily involved in fighting over there, it could hurt the markets in anticipation of a new and expensive military operation.
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