It’s a red Tuesday for the U.S. stock market, with all major indices on Wall Street plummeting by over 1% during midday trading in New York.
This downward spiral can be attributed to the relentless surge in yields on U.S. Treasuries. The 10-year yield has shattered the 4.75% barrier, reaching levels not seen since August 2007, while the 30-year yield has surged past 4.9%, inching closer to the significant 5% milestone.
On the data front, job openings in August have surpassed expectations by adding 690,000 positions, bringing the total to 9.6 million, underscoring the strong resilience of the American labor market.
Meanwhile, the U.S. dollar continues its unyielding strengthening, exacerbating risk aversion sentiments. The U.S. Dollar Index (DXY) has surged beyond the 107 level, marking its highest point in the last 10 months.
Adding to the market jitters, the CBOE Volatility Index, commonly known as the VIX and often regarded as the market’s fear gauge, has surged by a whopping 11% on the day. The VIX has now breached the 20 threshold, reaching its highest levels since late May 2023.
Cues From Tuesday’s Trading
The S&P 500 fell 1.3%, while the tech-heavy Nasdaq 100 tumbled 1.6%. Blue-chip stocks represented by the Dow Jones Industrial Average eased 1.1%, while small caps in the Russell 2000 Index slipped 1.4%.
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