- Stocks fell on Wednesday ahead of fresh economic data on growth and inflation.
- A $44 billion auction of seven-year Treasury notes was met with tepid demand.
- Bond yields spiked for a second day, with the 10-year bond climbing by seven basis points to 4.61%.
US stocks dropped for a second day of the short trading week on Wednesday, with the Dow Jones Industrial Average declining by more than 300 points as Treasury yields continued to spike.
An auction of seven-year Treasury notes was met with weak demand, marking the third sale of US government bonds this week to spark fears of oversupply amid forecasts of higher-for-longer interest rates. The Treasury sold $44 billion worth of the notes at 4.650%, with reports noting that domestic demand was weaker than average. On Tuesday, a sale of two and five-year notes was priced to weaker demand from investors.
The 10-year bond jumped seven basis points to 4.61%.
The sell-off in the bond market comes ahead of two important data points for investors as they try to assess the path of interest rates for the rest of this year. On Thursday, first-quarter GDP will see its first revision, with expectations for growth to be lower than initially reported for the first three months of the year.
More importantly, on Friday, the Bureau of Economic Analysis will publish the Federal Reserve's preferred inflation measure. Price increases as measured by the personal consumption expenditures index are expected to be on par with March figures, rising 2.7%, according to economists' estimates. However, a surprise to either the upside or downside could have a big impact on stocks and the broader market.
The Nasdaq Composite slid further from record highs hit on Tuesday, with the tech-heavy index spared from deeper losses by Nvidia, which rose almost 1% in the session.
Here's where US indexes stood at the 4 p.m. closing bell on Wednesday:
- S&P 500: 5,266.95, down 0.7%
- Dow Jones Industrial Average: 38,441.54, down 1.1% (411 points)
- Nasdaq Composite: 16,920.58, down 0.6%
Here's what else happened today:
- An MIT economist says the AI boom will only boost GDP by about 1%.
- Ozempic is at the center of South Park's latest season. That could be bad news for the drug maker's stock.
- Jamie Dimon warned of turmoil if the booming private credit market shows signs of weakness.
- The stock market could plummet 70% this cycle amid a "motherlode" of extreme FOMO, veteran investor John Hussman said.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil slumped 1% to $79.85 a barrel. Brent crude, the international benchmark, dropped 0.9% to $83.41 a barrel.
- Gold fell 0.8% to $2,336.20 per ounce.
- The 10-year Treasury yield rose seven basis points to 4.614%.
- Bitcoin dropped 1.6% to $67,286.78.