The stock market experienced a sell-off on Tuesday as Treasury yields continued to surge, driven by a jump in job openings. This news came after billionaire investor Ray Dalio predicted that the 10-year Treasury yield could rise to 5%. Similar comments were made by activist investor Bill Ackman and Blackrock CEO Larry Fink. Additionally, Congress faced internal turmoil as the House voted to oust Speaker Kevin McCarthy, causing concern among investors. The Dow Jones fell 431 points and is now negative for the year, while the S&P 500 and Nasdaq also suffered losses. Many leading stocks are breaking key levels, signaling a market correction.
Looking ahead, Dow Jones futures rose slightly after hours, along with S&P 500 futures and Nasdaq futures. However, it is important to note that overnight action in futures does not necessarily translate into actual trading in the next regular stock market session. Meanwhile, the 10-year Treasury yield surged to a 16-year high of 4.8%, prompting concerns about the stability of the market. Ray Dalio, Bill Ackman, and Larry Fink have all warned about the potential risks of rising yields. Additionally, Speaker Kevin McCarthy was ousted from the House, raising questions about the possibility of a government shutdown in mid-November. Overall, the stock market is in a correction phase, with major indexes and leading stocks showing poor performance.
In Tuesday’s stock market trading, the Dow Jones Industrial Average fell 1.3%, marking a fresh four-month low. The S&P 500 index also tumbled 1.4%, while the Nasdaq composite hit a four-month closing low. The small-cap Russell 2000 saw a 1.9% slump to a five-month low. Losers outnumbered winners by a significant margin on both the Nasdaq and NYSE. Growth ETFs, such as the Innovator IBD 50 ETF and the iShares Expanded Tech-Software Sector ETF, also experienced declines. It is difficult to predict when the market slide will end, but it is clear that the 10-year Treasury bond yield will have an impact on stock performance. Other factors, such as geopolitical instability and political dysfunction in Congress, also contribute to investors’ unease.
