Bond yields extended their climb Tuesday, with the 30-year Treasury hitting its highest level since June 2002 and pulling the Dow, S&P 500 and Nasdaq lower. Technology shares bucked the drop as investors welcomed Anthropic's IPO plans, while markets braced for Wednesday's PCE inflation report.
The Dow Jones Industrial Average fell 316.58 points, or 0.61%, to 51,164.93, the S&P 500 dropped 22.49 points, or 0.29%, to 7,661.20, and the Nasdaq Composite slid 36.19 points, or 0.13%, to 26,784.19. But the S&P 500 technology index rose 0.1%, lifted by optimism over Anthropic's planned public debut.
Treasury yields climb to multi-decade highs
The 30-year US Treasury bond yield hit its highest level since June 2002, last up 4.94 basis points at 5.6114% from 5.562% late Monday. The benchmark 10-year note yield rose 4.28 bps to 5.285%, from 5.242%. French 10-year yields, meanwhile, sat near 2008 highs at 4.74% and were set for their biggest monthly rise since 2022.
Rising oil prices tied to the seven-month war in the Middle East and persistent worries about inflation have driven yields higher. The Federal Reserve raised interest rates earlier this month for the first time since 2023, and the CME Group's FedWatch Tool showed investors pricing in a near-70% chance of a 25-basis-point rate hike in October.
Consumer confidence slumps ahead of PCE
Investors also digested data showing US consumer confidence dropped to its lowest level in more than 12 years in September, with households expecting both business conditions and the labor market to weaken over the next six months.
According to Reuters: "Some investors are preparing for… the PCE tomorrow." Peter Cardillo, chief market economist at Spartan Capital Securities, said an acceleration in inflation in Wednesday's personal consumption expenditures report would likely cement an October rate hike, adding to the fear already present in the bond market.
Anthropic IPO details emerge
Anthropic's IPO prospectus showed the AI lab has grown sharply over the past year but has also posted wider losses. The company is targeting a valuation above $2 trillion, a figure that could set a benchmark for how Wall Street measures AI leaders. Anthropic has also called for more AI regulation.
Beyond US markets, MSCI's gauge of global stocks fell 4.57 points, or 0.40%, to 1,134.70. The pan-European STOXX 600 index was down 0.15%.
Source: Investing.com
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