Bond Yields and Oil Prices Spook US Stock Market
US stocks took a hit on Tuesday as investors grew anxious about rising bond yields and oil prices. The market downturn was led by tech stocks, with the Nasdaq Composite falling 1.3%, followed closely by the S&P 500 at 0.6% and the Dow Jones Industrial Average at 0.2%. Analysts attributed this decline to the 30-year Treasury yield surpassing 5.3% for the first time since the 2007 global financial crisis, indicating a decrease in demand for US debt.
The higher yields are raising concerns about government deficit spending and the country's burgeoning $40 trillion debt. This has led to increased borrowing costs across various sectors, including auto loans and mortgages, which have seen rates rise to as high as 6.75% for a 30-year fixed-rate mortgage.
Oil prices also contributed to the market volatility, reaching their highest levels in over two weeks following President Donald Trump's threat to bomb Oman if it interferes with his plans to open the strategic Strait of Hormuz. Brent crude futures traded at around $91 per barrel, while US West Texas Intermediate crude futures rose to $84 per barrel.