U.S. stocks closed sharply lower Thursday as rising Treasury yields renewed concerns that higher borrowing costs could derail the bull market, despite the Treasury Department’s expanded debt buyback plan aimed at easing pressure in the bond market.
The Dow Jones Industrial Average fell 703.84 points, or 1.32%, to close at 52,759.21, with Walmart’s 9% decline adding significant pressure. The S&P 500 dropped 0.87% to 7,641.16, while the Nasdaq Composite lost 1% to finish at 26,067.17.
Treasury yields continued to climb, effectively reversing much of the relief seen after the government announced plans to increase repurchases of longer-dated debt. The 10-year Treasury yield rose more than 5 basis points to 4.704%, while the 30-year yield climbed above 5.24%, after hitting its highest level in nearly two decades earlier in the week.
Rising oil prices added further pressure on markets as tensions between the U.S. and Iran escalated. WTI crude gained nearly 3% to $86.83 per barrel, while Brent crude rose more than 2% to $93.78.
Investors were also unsettled by renewed threats of tougher economic measures and sanctions against Iran. Meanwhile, Walmart posted its worst trading day in more than four years after disappointing U.S. comparable sales and a weaker-than-expected earnings outlook.
The sell-off came just one day after Wall Street had bounced, with the S&P 500 ending a three-session losing streak as Treasury yields temporarily retreated following the government’s debt buyback announcement.
Frequently Asked Questions
Why did the Dow fall more than 700 points?
The sell-off was driven by rising Treasury yields, higher oil prices, and a sharp drop in Walmart shares, increasing concerns about pressure on the broader bull market.
Why are rising Treasury yields negative for stocks?
Higher yields increase borrowing costs and can make bonds more attractive relative to equities, putting pressure on stock valuations.
Why did the Treasury debt buyback plan fail to calm yields?
Despite the expanded buyback operation, investors remained concerned about long-term U.S. debt supply, inflation, and elevated borrowing costs, pushing yields higher again.
How could rising oil prices affect the stock market?
Higher oil prices can fuel inflation, pressure consumers and corporate profits, and potentially limit expectations for lower interest rates—creating additional headwinds for equities.
