4:10pm: Dow closes down 400 points
The Dow Jones saw a 400-point drop by the end of Wednesday’s trading day as US stocks declined while Treasury yields surged, unsettling investors concerned about potential shifts in interest rates following recent data releases.
The S&P 500 fell by over 0.7%, the Dow Jones Industrial Average dropped about 1%, shedding over 400 points, and the Nasdaq Composite declined by around 0.6%.
Rising bond yields, with the 10-year yield reaching its highest level since early May, fueled worries that the Federal Reserve might maintain higher rates for an extended period.
Despite Nvidia's post-earnings rally, which lifted hopes for AI growth and propelled its stock to a record high, broader market optimism waned, with concerns mounting over the Fed's monetary policy stance amidst stronger-than-expected consumer confidence data.
12:05pm: Sell-off continues
The three major stock indexes pushed lower at midday as rising Treasury yields added to investor concerns that recent economic data may not be enough to encourage the Fed to begin lowering interest rates.
IG senior market analyst Axel Rudolph noted that rapidly rising yields globally followed a disappointing bond auction on Tuesday.
“The US 2-year yield nearly hit the 5% mark, the 10-year 4.60%, a near four-week high, while the German 10-year yield touched its November 2023 peak at 2.66%, putting downside pressure on stock indices with most trading lower by between half and a percentage point,” Rudolph said.
Leading the declines at noon was the Dow Jones, which shed 0.9% at 38,505 points.
The S&P 500 slid 0.6% at 5,275 points and the Nasdaq was down 0.4% at 16,954 points.
10am: US stocks open lower
Wall Street opened firmly on the back foot led by the travel and semiconductor sectors.
The Dow Jones led the falls at the open, down over 1% initially.
But losses were pared as the session continued.
After just over half an hour the Dow was down 0.8%, the S&P 500 0.6% and the Nasdaq Composite 0.5%
American Airlines led the fallers after it announced a cut in its profit forecasts for 2024 along with the sudden departure of its chief commercial officer.
Cruise operator Viking, which earlier this month became second-largest IPO of the year, missed earnings expectations in its first quarter but delivered a revenue beat.
The river cruise line operator said it expected most of its revenue and profits to come in the second and third quarters, its primary season.
7.33am: Wall Street called lower ahead of opening bell
US stocks are expected to join the global sell-off on Wednesday, and engage in a wide retreat when trading begins shortly.
S&P 500 futures are down 0.58%, Nasdaq 100 futures are 0.62% lower and those for the Dow Jones have fallen 0.59%.
European markets are bathed in red so far, led by a 1.2% fall in Paris for the CAC 40 and 1.1% decline for the FTSE MIB in Milan.
The FTSE 100 is down 0.4% and Germany's DAX has lost 0.8%.
Asian Pacific stock indices sold off aggressively this morning, with the exception of China’s Shanghai Composite which was effectively unchanged.
Yesterday's Wall Street session ended mixed, with modest losses for the Dow Jones and Russell 2000, no change for the S&P 500 and a fresh record high for the Nasdaq, supported by another strong move in NVIDIA, which also hit a new high, up almost 7%.
Nvidia is just above the flatline in premarket trading.
Market analyst David Morrison at Trade Nation said: "There’s been a big jump in US Treasury yields since Friday, and this appears to be weighing on sentiment.
"It’s also fair to say that there’s nothing out there which is undeniably positive. The first quarter earnings season is pretty much done now, so there’s a risk that the market has lost one significant leg of support."
"In the absence of fresh corporate results, investors will have to take their lead from upcoming economic data and comments from Federal Reserve members. The latter will be in short supply now as Fed members go into purdah in the week before the next monetary policy meeting which finishes on 12th June."
Golly. That's a more than 15 point lead Trump has over Biden now in the betting markets pic.twitter.com/cg9pTTJTVE
— Jemima Kelly (@jemimajoanna) May 29, 2024