US: Stocks fall as soaring Treasury yields fuel rate worries

WALL Street stocks tumbled on Tuesday as Treasury yields hit a 16-year high, feeding worries about elevated interest rates that could weigh on the economy.

The Dow Jones Industrial Average slipped 1.3 per cent to 33,002.38.

The broad-based S&P 500 dropped 1.4 per cent to 4,229.48, while the tech-rich Nasdaq Composite Index fell 1.9 per cent to 13,059.47.

Stocks stumbled after Treasury yields surged on the back of a job openings report that “signaled the labour market is not breaking,” said Edward Moya of the Oanda trading platform.

The 10-year Treasury yield has hit its highest level since 2007, and the figure is closely watched as it can be used as a benchmark for other interest rates.

A cooling labour market was expected to emerge, after multiple interest rate hikes by the Federal Reserve over the past year.

SEE ALSO

US: Wall St falls at open as Treasury yields surge; jobs data in focus

Asean Intelligence

Get insights into businesses across South-east Asia

Get the free report

But the August job openings data showed a large pickup with vacancies, Moya added in a note.

A hotter-than-hoped labour market could add pressure on central bank policymakers when they mull further interest rate hikes, fueling investor jitters.

Looking ahead, traders will be eyeing the Labor Department’s employment report due on Friday, to keep tabs on the state of the US job market. AFP