Stocks Slip after 10-Year Treasury Yield Crosses 5% for the First Time since 2007
Stocks dipped Friday as traders focused on a recent run higher in the 10-year Treasury yield.
The yield on the benchmark 10-year Treasury crossed 5% for the first time in 16 years. The 10-year yield hit 5.001% around 5 p.m. ET on Thursday, the first time it has traded above that level since July 20, 2007 — when it yielded as high as 5.029%. It was last trading at 4.939%.
Shares of SolarEdge tumbled 30% after the company trimmed its third-quarter revenue guidance. Knight-Swift Transportation rallied nearly 15% after beating estimates in the third quarter on both lines.
The action follows a volatile day for stocks. The 30-stock Dow shed 250.91 points, or 0.75%, while the S&P 500 lost 0.85%. The Nasdaq Composite slid nearly 1%.
Stocks were rattled Thursday after Federal Reserve Chair Jerome Powell said inflation remains too high and lower economic growth will likely be needed to bring it down. Powell also said he doesn’t think rates are too high now.
“While the path is likely to be bumpy and take some time, my colleagues and I are united in our commitment to bringing inflation down sustainably to 2 percent,” he added.
Though Powell did not commit to a path forward for rates at his speaking engagement, the market seems to think the central bank will skip a hike in November. Fed fund futures pricing reflects a nearly 99% likelihood that the central bank will keep rates the same at the conclusion of its November meeting, according to the CME FedWatch Tool.
The major averages are on pace for losses on the week. The S&P 500 is down 1.2% through Thursday’s close, while the Nasdaq is off 1.7%. The Dow is down nearly 0.8%.
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