SAEDNEWS: US stocks fell sharply again as Treasury yields continued to rise despite a planned expansion of government debt buybacks. Higher oil prices and a steep decline in Walmart shares added to the pressure.
According to SaedNews: US stock indexes suffered another decline on Thursday as Treasury yields continued to climb despite an unusual move by the US Treasury Department to increase debt buybacks, according to CNBC.
The rise in borrowing costs intensified concerns that higher financing expenses could undermine the stock market’s upward trend.
The Dow Jones Industrial Average lost 703.84 points, or 1.32%, to close at 52,759.21. The S&P 500 fell 0.87% to 7,641.16, while the Nasdaq dropped 1% to 26,067.17.
Treasury yields increased even after the US Treasury announced Wednesday that it would at least double its purchases of 10-, 20- and 30-year debt in the coming months. Nevertheless, the 10-year yield on Thursday moved back above its level before the buyback plan was announced.
The 10-year Treasury yield rose more than 5 basis points to 4.704%, while the 30-year yield gained more than 5 basis points to 5.248%. Earlier this week, the 30-year yield had reached its highest level in nearly 20 years.
Adam Phillips, investment manager at EP Wealth Advisors, questioned whether the buyback program could calm the bond market. He said the initiative does not address the market’s underlying problem, with structural factors extending beyond the control of the Treasury and US government, while previous interventions have generally produced only short-lived effects.
Higher oil prices added another source of pressure. Escalating tensions between Iran and the US pushed October-delivery West Texas Intermediate crude nearly 3% higher to $86.83 a barrel, while Brent crude gained more than 2% to $93.78. US Treasury Secretary Scott Bessent also announced the imposition of the toughest sanctions in history against Iran.
A 9% plunge in Walmart shares further weighed on the market. The retailer posted its worst daily performance in more than four years after same-store sales growth in the US came in below analysts’ expectations, while its adjusted third-quarter and full-year profit forecasts also fell short of market expectations.
Wall Street ended lower just one day after the S&P 500 had recovered from three consecutive losing sessions.
