Wall Street Declines Affected by Treasury Yields

Treasury yields reached their highest levels in almost four weeks.

Ignacio Teson•Wednesday, May 29, 2024•1 min read

The three major Wall Street indices are operating with losses in mid-week trading. The averages are down, pressured by the increase in Treasury yields, driven by changes in bets on interest rate cuts.

The leading Dow Jones index, composed of 30 giant stocks, fell by 0.92% to 38,496.64 points, while the S&P 500 index of 500 stocks dropped by 0.64% to 5,272.18 points. The technology-heavy Nasdaq Composite decreased by 0.46% to 16,941.12 points.

Treasury yields reached their highest levels in almost four weeks after unexpected consumer confidence data released on Tuesday and comments from the Federal Reserve that shifted bets on rate cuts.

Neel Kashkari, President of the Minneapolis Fed, stated that the probability of a rate hike is low but not impossible, and more data is needed. According to the CME FedWatch tool, expectations for rate cuts shifted from September to November.

SPX

The Dow Jones was trading at its lowest level in almost a month, with all major subsectors of the S&P 500 declining. The Nasdaq dropped after surpassing the 17,000-point mark for the first time on Tuesday, driven by Nvidia’s stock performance.

The Fed’s Beige Book, expected to be released later, is anticipated to provide insights into the state of the economy. Markets will also be watching comments from the heads of the New York and Atlanta Fed, John Williams and Raphael Bostic, respectively.

Overall, the market’s decline is a reaction to rising Treasury yields and shifting expectations regarding future Federal Reserve interest rate cuts, contributing to a cautious trading environment.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.