NEW YORK – US stocks fell on Wednesday as underwhelming earnings and ongoing fighting in the Middle East weighed on investor optimism.
The Dow Jones Industrial Average fell 1 per cent to 33,665.08.
The broad-based S&P 500 sank 1.3 per cent to 4,314.60, while the tech-heavy Nasdaq Composite Index dropped 1.6 per cent to 13,314.30.
The yield on the popular 10-year US Treasury rose above 4.9 per cent for the first time since 2007, as traders prepared for the likelihood of interest rates remaining higher for longer.
Yields and prices move inversely to one another, meaning that when the price of a bond falls, its yield rises.
The 10-year bond is used to help price everything from mortgages to home loans and when it rises, so does the pain for consumers.
“I think the stock sell-off mainly reflects the treasuries sell-off,” Karl Haeling from LBBW told AFP.
He added that stronger-than-expected retail sales figures earlier in the week raised concerns that the US Federal Reserve will “keep the rates higher for longer.”
US President Joe Biden paid a brief visit to Israel on Wednesday, amid ongoing fighting between Israel and Hamas after the militant group’s deadly attack on Israel on Oct 7, killing some 1,400 people.
Retaliatory air strikes on the Gaza Strip have killed almost 3,500 people, according to Palestinian health authorities in the Hamas-run enclave.
Petrol prices also rose on Wednesday on concerns the conflict could spread to other countries in the oil-rich region, which would impact supplies.
Among individual stocks, United Airlines saw its share price decline 9.7 per cent after publishing softer growth forecasts.
But there was positive news for consumer goods firm Procter & Gamble, which rose 2.6 per cent on better-than-expected earnings. AFP