Overseas Market Report

Wall Street stocks stumbled on Thursday as US Treasury yields continued their ascent to multi-year highs on the latest round of strong economic data, building concerns for an acceleration of inflation. The Dow suffered its first decline in six sessions, while both the S&P and Nasdaq had their worst day since June 25.

The yield on the benchmark 10-year Treasury note climbed to a seven-year high of 3.232 per cent, marking its largest daily jump since the 2016 US presidential election. Data on jobless claims and factory orders were the latest in around of strong economic reports this week, putting the focus squarely on Friday’s payrolls report for September. “The follow-through on the Treasury rates today, actually the follow-through worldwide on Treasuries, has a big part to do with this,” said JJ Kinahan, chief market strategist at TD Ameritrade in Chicago. “And just in general, so many of these sectors have been so hot it may be time to take a little break,” he added.

Financials were one of the few bright spots on Wall Street, rising 0.71 per cent. Banks, which typically benefit from rising rates, gained 0.81 per cent. Thursday’s data, which showed jobless claims fell to a near 49-year low, followed comments this week from several Federal Reserve officials, including Chairman Jerome Powell, that underscored the strength of the economy.

The Dow Jones Industrial Average fell 200.91 points, or 0.75 per cent, to 26,627.48, the S&P 500 lost 23.9 points, or 0.82 per cent, to 2,901.61 and the Nasdaq Composite dropped 145.58 points, or 1.81 per cent, to 7,879.51. Equities have struggled over the past year when interest rates climbed faster than investors were anticipating.

Morning Market Note - Friday 5th October