Nasdaq Loses Big As Bond Yields Continue To Surge

Stocks ended the day sharply lower, as surging bond yields stoked investor fears of equity valuations and forced them to ditch growth-focused stocks. The 10-year Treasury yield rose above 1.75% at its session peak -- its highest level since January 2020 -- while the U.S. Federal Reserve said it would allow inflation to run hotter than usual in order to ensure a smooth economic recovery.

As a result, the Dow tumbled from a new intraday record high, while the tech-laden Nasdaq took a beating and snapped its three-day win streak. Apple (AAPL), Alphabet (GOOGL), and Microsoft (MSFT) all lost at least 2%, while sector behemoth Tesla tumbled over 5%. Nevertheless, Wall Street's "fear gauge," the Cboe Volatility Index (VIX), fell to an annual low earlier today before pivoting higher at the close. 

The Dow Jones Industrial Average (DJI - 32,862.30) fell 153.1 points or 0.5% for the day. UnitedHealth (UNH) topped the list of Dow components with a 2.8% rise, while Chevron (CVX) fell 3.5% to pace the laggards.

Meanwhile, the S&P 500 Index (SPX - 3,915.46lost 58.7 points or 1.5% for the day. The Nasdaq Composite (IXIC - 13,116.17shed 409 points or 3% for the day.

Lastly, the Cboe Volatility Index (VIX - 21.58) rose 2.4 points or 12.2% for the day.

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OIL LOGS FIFTH CONSECUTIVE LOSS

Oil prices fell for the fifth-straight session, locking in their worst day since September. A stronger U.S. dollar, in conjunction with increased inventory and the persistence of the pandemic continue to weigh on black gold even as economic recovery efforts get underway. As a result, April-dated crude shed $4.87, or 7.5%, to settle at $59.73 per barrel.

Gold prices fell as well, as U.S. bond yields made a break higher and a firmer dollar sent investors away from the yellow metal. In response, April-dated gold shed $5.40 cents, or 0.4%, to settle at $1,732.50 an ounce.  

Disclaimer: Schaeffer's Investment Research ("SIR" or "we" or "us") is not registered as an investment adviser. SIR relies upon the "publishers' ...

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