U.S. stocks close lower as Treasury yields climb

  • World
  • Thursday, 30 May 2024

NEW YORK, May 29 (Xinhua) -- U.S. stocks ended lower on Wednesday as investors grew jittery about the interest-rate outlook.

The Dow Jones Industrial Average fell by 411.32 points, or 1.06 percent, to 38,441.54. The S&P 500 sank 39.09 points, or 0.74 percent, to 5,266.95. The Nasdaq Composite Index shed 99.30 points, or 0.58 percent, to 16,920.58.

All of the 11 primary S&P 500 sectors ended in red, with energy and industrials leading the laggards by going down 1.76 percent and 1.42 percent, respectively. Technology posted the weakest decline, down 0.36 percent.

The U.S. economy expanded at a "slight or modest" pace across most regions since early April, with consumers pushing back against higher prices, according to the Federal Reserve's Beige Book survey of regional business contacts, which was released Wednesday.

"Retail spending was flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers," according to the report. "Overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risks."

U.S. Treasury yields were trading at their highest levels of the session following a third consecutive lackluster auction of government debt. Investors showed relatively little appetite for seven-year notes in a 44 billion U.S. dollars auction on Wednesday, with the bonds selling at a yield of 4.650 percent, higher than the market rate at the time of the sale.

"Today is really all about interest rates," said Adam Turnquist, chief technical strategist at LPL Financial, adding that the 10-year and 2-year yields have touched "uncomfortable levels." "That all is creating some angst among investors."

David Miller, chief investment officer of Catalyst Funds in New York, said: "The Federal Reserve will probably not be able to cut interest rates as they say." "It's unclear how to lower interest rates without driving up inflation."

According to the CME FedWatch tool, investors now see a 54 percent chance that the Federal Reserve will hold interest rates steady through its next three meetings, up from 42 percent a week ago.

More than two-thirds of the 30 stocks in the Dow fell. Insurance provider UnitedHealth led the blue-chip average lower with a slide of near 4 percent following management commentary around its Medicaid business. Other stocks tied to the federal health insurance program also dropped, including Molina Healthcare, Humana, and Elevance Health.

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