Dow Tanks as Treasury Yields Hit Multi-Year Highs

US stocks took a hit on Wednesday as Treasury yields surged to multi-year highs, sparking concerns that the Federal Reserve could raise interest rates again in October.

The Dow Jones Industrial Average plummeted 352.10 points, or 0.68%, to 51,511.59, while the S&P 500 dropped 0.75% to 7,706.05 and the Nasdaq Composite declined 1.13% to 26,936.04.

The strong business activity readings in September's purchasing managers' index data fueled expectations that the Fed could continue raising interest rates to combat inflation. The 10-year Treasury yield reached 5.135%, its highest level since July 2007, and the two-year Treasury yield rose to 4.947%, its highest level since May 2024.

Federal Reserve Governor Michael Barr said further policy adjustments would likely be required as inflation remains above the central bank's 2% target.