Wall Street turned lower early today as pressure from rising bond yields continued to undercut stocks, the Associated Press reports. Futures for the S&P 500 fell 0.5% before the bell, while the Dow Jones industrials dipped 0.4%.
After a sizzling first half of 2023, stocks have shed about 40% of their gains since the end of July amid growing acceptance that interest rates will remain elevated for longer than previously thought as the Federal Reserve tries to trim inflation to its 2% target. That in turn has pushed Treasury yields to their highest levels in more than 16 years.
The yield on the 10-year Treasury continued its ascent early this morning, climbing to 4.74% from 4.69% late Monday. It’s near its highest level since 2007. High yields send investors toward bonds that are paying much more than in the past, which pulls dollars away from stocks and undercuts their prices.
The yield on the 2-year Treasury inched up to 5.12% from 5.11% late Monday.
Any relief rally from a compromise spending bill approved by Congress over the weekend, which has staved off a U.S. government shutdown for another few weeks, has appeared muted under pressure from heavy selling of bonds.
In corporate news, drugmaker Eli Lilly said it was buying Point Biopharma, which develops cancer-fighting treatments called radiogilands. Eli Lilly is paying $1.4 billion for Point, or $12.50 per share. Point shares jumped close to 85% before the bell.
U.S. benchmark crude oil lost 41 cents to $88.41 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 54 cents to $90.17 per barrel.
In currency dealings today, the dollar rose to 149.93 Japanese yen from 149.86 yen. The dollar has gained in value against many other currencies as U.S. interest rates have risen faster than those in many other countries. Higher interest rates can mean higher yields for investments.
