Wall Street stocks closed at their lowest level since December 2020, while U.S. Treasury yields edged higher after intense volatility in Britain’s gilt market and a thin sell-off of new government bonds shook investor sentiment.
The blue-chip S&P 500 ended the day down 1 percent after losing 4.7 percent over the previous week. The technology-heavy Nasdaq Composite fell 0.6 percent on Monday.
Monday’s wobble in stocks came as the yield on the 10-year U.S. Treasury note, a benchmark for global borrowing costs, added 0.22 percentage point to 3.92 percent — the highest level since 201[ads1]0. Bond yields rise when prices fall.
The sell-off in the US followed a brutal session in London, where gilt yields rose for a second trading day in a row after the British government’s plans for major tax cuts spooked investors. Britain’s 10-year gilt yield rose by the most in 40 years on Monday, according to Refinitiv data.
A sell-off in US two-year Treasuries on Monday also highlighted how fund managers are demanding that the government pay higher borrowing costs on expectations that the Federal Reserve will continue to push interest rates up sharply.
Last week, the Fed led the charge in a series of interest rate hikes by other global corporations, implementing a third straight hike of 0.75 percentage points to a target range of 3 to 3.25 percent.
The dollar, which tends to strengthen in times of economic and market stress, rose 0.8 percent against a basket of six peers, hitting a fresh 20-year high.
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