The war in Iran, government debt levels and higher yields in the bond market combined to drive down U.S. stocks Wednesday, according to a report by the Associated Press.
The S&P 500 fell 0.6%, one day after topping its record high, while the Dow Jones Industrial Average was down 535 points, or 1%, as of 11 a.m. Eastern time, and the Nasdaq composite was down 0.8%.
Stocks went down as yields climbed in the bond market. The yield on the 10-year Treasury rose to 5.30% from 5.27% late Tuesday.
Higher bond yields not only suppress prices on stocks, but they can also make it more expensive for businesses and consumers to borrow.
Investors cited lingering uncertainty about when the war with Iran will end, the price of crude oil inching back over $100 per barrel — it was $72 per barrel before the war began — mounting government debt in the U.S. and Europe and the lack of regulatory guidelines for artificial intelligence.
“Some very tough political choices stare us in the face,” said Kristalina Georgieva, managing director for the International Monetary Fund.
