Dow Jones Industrial Average falls over 700 points as yields rebound
The Dow Jones Industrial Average fell 703.84 points, or 1.32%, on Thursday as bond yields rebounded after a Treasury Department plan to ease longer-term debt pressure failed to stick. Higher borrowing costs and a sharp drop in Walmart shares weighed on equities, according to market reports.
Key Takeaways
- The Dow Jones Industrial Average closed at 52,759.21 after a 703.84-point drop; the S&P 500 fell 0.87% and the Nasdaq Composite lost 1%.
- Yields on the 10-year and 30-year Treasurys climbed back near pre-intervention levels a day after Treasury announced larger long-dated debt buybacks.
- Treasury Secretary Scott Bessent said the buyback could exceed the announced $4 billion, but yields still rose and stocks finished lower.
- Walmart shares slid about 9% after U.S. comparable sales and earnings guidance missed expectations, weighing on the Dow.
- Oil prices also rose amid U.S.-Iran tensions, adding another pressure point for markets.
U.S. stocks sold off Thursday even after the Treasury Department’s unusual midweek move to buy more longer-dated debt. The rebound in yields revived worries that higher borrowing costs could undercut the bull market, as detailed in CNBC’s live market coverage.
Why did the Dow Jones Industrial Average fall so sharply?
The Dow Jones Industrial Average finished down 703.84 points, or 1.32%, at 52,759.21. The S&P 500 closed at 7,641.16, off 0.87%, and the Nasdaq Composite ended at 26,067.17, down 1%.
Losses deepened as the session progressed. The Dow was already lower at the open, then finished near a 700-point decline as bond yields moved higher and heavyweight retailers pressured the average.
Investors focused on whether higher yields would keep lifting mortgage and other consumer borrowing rates, which typically track the 10-year Treasury note.
Did the Treasury plan to tamp down yields work?
On Wednesday, Treasury said it would at least double buybacks of 10-, 20- and 30-year debt in coming months, lifting the scheduled amount to about $4 billion. Bonds rallied and yields fell on that news, but the relief proved short-lived.
By Thursday, the 10-year yield was back around 4.70% and the 30-year near 5.25%, erasing much of the prior day’s impact, NBC News reported.
Bessent told CNBC the operation could be larger than $4 billion and that Treasury has a “big tool kit,” including signaling. Yields still spiked after his remarks, and stocks extended declines.
Market strategists questioned whether buybacks alone can fix deeper fiscal pressures. Adam Phillips of EP Wealth Advisors said the program is “not the cure to what ails the bond market,” arguing structural forces are beyond a short intervention.
What else dragged stocks lower on Thursday?
Walmart posted its worst day in more than four years, falling about 9% after U.S. comparable sales missed analyst expectations, as did its adjusted earnings forecasts for the third quarter and full year. That slide weighed heavily on the Dow.
Energy prices rose again as tensions with Iran intensified. West Texas Intermediate crude moved higher and Brent closed at $93.78 a barrel, up more than 2%. Bessent said the U.S. would pursue severe sanctions and economic pressure aimed at Iran, while conceding uncertainty over when the conflict would ease.
Separately, Treasury’s intervention came as outstanding U.S. debt topped $40 trillion for the first time, a backdrop that left some analysts doubting lasting yield relief without firmer fiscal consolidation.
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