The Dow Jones Industrial Average has been on a three-day losing streak, falling by around 400 points or 1.0% on Wednesday (markets still open as of the time of publishing this piece). This decline is attributed to a combination of upbeat Treasury yields and persistently high interest rates. The S&P 500 and Nasdaq Composite also experienced losses, closing down by 1.0% and 1.5%, respectively.
The yield on the benchmark 10-year Treasury note reached above 4.25% on Wednesday, the highest level since July. This increase is a result of strong economic data and concerns about rising deficits, which seem to be overshadowing the recent Fed rate reduction. The market is particularly unsettled by the possibility that the Fed may be less aggressive with future rate cuts than anticipated, leading to expectations of fewer cuts before the end of the year.
