Wall Street Goes Down After 10-year Yield Climbs to the Cusp of 5%

Thursday, Wall Street went down because the 10-year Treasury yield could reach 5% for the first time since 2007. There were mixed profit reports from Tesla and other big companies, which caused the S&P 500 to drop 36.60 points, or 0.8%, to 4,278.00. It fell 250.91 points, or 0.7%, to 33,414.17 on the Dow Jones Industrial Average and 128.13 points, or 1%, to 13,186.18 on the Nasdaq COMP.

This was felt in the stock market because of the bond market. Since the summer, quickly rising yields have put pressure on Wall Street. After going up from 4.91% late Wednesday, the yield on the 10-year Treasury hit 4.99%. It then went down to 4.98%. When the 10-year yield goes up, the cost of debt goes up, the cost of investments goes down, and it costs businesses more to borrow money and grow.

Yields changed after the head of the Federal Reserve said again that the bank would wait to decide on interest rates until it sees how the economy and prices are changing. It has already raised its main overnight rate to the highest level seen since 2001.

In a speech on Thursday, Fed Chair Jerome Powell said that the recent rise in longer-term bond yields, like those on the 10-year Treasury, has been slowing the economy without the need for more rate hikes.

In a speech on Thursday, Fed Chair Jerome Powell said that the recent rise in longer-term bond yields, like those on the 10-year Treasury, has been slowing the economy without the need for more rate hikes.

All stocks are hurt by high yields, but stocks that are seen as very expensive or that are expected to grow a lot in the future are hurt the most. That’s often made Big Tech the center of attention, and some companies said they made a range of gains.

Tesla’s stock dropped 9.3% after it announced worse summer results than analysts had thought. It has been lowering prices to get more customers, but that makes it less profitable.

Even though Zions Bancorp posted a better-than-expected profit for the most recent quarter, its stock fell 9.7%. It and other banks smaller than the biggest names in the industry had a rough start to the year because of high-interest rates, which were a factor in the failure of three well-known banks.

The company Netflix, on the other hand, went up 16.1%. Analysts didn’t expect it to make as much money in the last quarter as it did, and it said it would raise prices on some membership levels to bring in more money.

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