Stock Market Suffers: 10-Year Treasury Yield Surpasses 5% [60S4QqiZdVa]
- Yield exceeds 5% for the first time since 2007 At the end of October 19, for the first time in 16 years, the 10-year US Treasury bond yield exceeded the 5% mark, reaching 5.001%. Concerns about higher interest rates have weighed on the stock market throughout the past week. For the whole week, the S&P 500 lost 2.4%, the Dow Jones lost 1.6%. Nasdaq dropped 3.2%, marking the second consecutive week of decline. - ECB may not lower interest rates until at least July 2024 According to a Reuters survey of 85 economists, the majority view is that the ECB's first cut will be in the third quarter of 2024 or later and deposit interest rates will be at 3.5% at the end of September 2024. - China strongly sells US government bonds to protect the yuan Chinese investors, including the People's Bank of China, have sold US bonds and stocks at the strongest pace in four years. The move comes as the PBoC attempts to protect the value of the yuan. China's currency has fallen 5.7% against the US dollar this year. 10-Year US Bond Yield Chart - At around 5:00 p.m. local time on Thursday, the 10-year US Treasury bond yield touched 5,001%, marking the first time it exceeded this threshold since July 2007. - Yields are rising, even when receiving relatively good information about inflation. This is the main reason why the stock market is weak. - Besides, the 30-year Treasury bond yield also reached its highest level since July 2007.