On Tuesday, US stock indexes were under selling pressure, jeopardizing a series of four-session gains for Dow industrialists, as interest-rate-sensitive tech stocks were hammered by higher yields.
A steady rise in the yield on 10-year Treasury bills TMUBMUSD10Y,
which was around 1.54%, required investors to change their discount rate for stocks that were bought in the hope of continued growth. Higher rates also force some investors to adjust their view of buying stocks relative to perceived risk-free assets like government bonds.
The Dow Jones Industrial Average DJIA,
was down 0.3% to 34,763, with the blue chip index facing a four-session rise. The S&P 500 SPX index,
was down 0.7% to 4,413, while the Nasdaq COMP Composite Index,
was trading down more than 1% at 14,814.
In other news, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen are expected to appear before a Senate panel at 10 a.m. EST to discuss the state of the economic recovery amid of the coronavirus pandemic.
Yellen said on Tuesday that the Treasury Department would likely exhaust extraordinary measures to avoid default on its debt if Congress had not acted to raise or suspend the debt limit by October 18. limited resources that would quickly run out, ”she said in an update sent to congressional leaders.
Meanwhile, energy markets are another cause for concern, as Europe and Asia scramble for natural gas supplies. The NG00 natural gas lead contract has jumped 138% this year.
In corporate news, the actions of Ford Motor Co. F were up after the automaker announced plans to spend $ 11.4 billion to build “mega-campuses” in Tennessee and Kentucky to help deliver new electric vehicle manufacturing capacity .