FX.co ★ Wall Street Slides as Bond Yields Spike

U.S. stocks experienced a significant decline on Wednesday, driven by a surge in Treasury yields and renewed fiscal concerns that weighed on investor confidence. The S&P 500 dropped by 1.6%, while the Nasdaq saw a 1.3% decrease, and the Dow Jones plunged by 817 points. Yields on long-term bonds soared following a lackluster $16 billion auction of 20-year Treasuries, with the 30-year yield rising to approximately 5.08%—its highest level in 2023. This spike reflects mounting anxiety that a proposed tax-and-spending bill in Washington could exacerbate the federal deficit. Adding to the unease, retail earnings failed to reassure investors: Target fell 5.2% after missing estimates, revising its outlook downward, and citing weakened consumer demand influenced by tariffs. Similarly, Lowe’s and TJX suffered declines of 3% and 2.9%, respectively, offering little comfort to the market. UnitedHealth saw a 5.7% drop following reports that it incentivized nursing homes to reduce hospital transfers. Conversely, Alphabet advanced by 3% due to new investments in artificial intelligence. Furthermore, investors remain alert to the depreciating U.S. dollar and potential impacts stemming from the ongoing G-7 summit, adding another layer of uncertainty to economic forecasts.