U.S. stock benchmarks on Tuesday were under selling pressure, putting in jeopardy a four-session string of gains for the Dow industrials, as interest-rate sensitive technology stocks were hammered by a rise in yields.
A steady climb in the 10-year Treasury note yield
which was at around 1.54%, was forcing investors to alter their discount rate for stocks that have been bought on hopes of persistent growth. Higher rates also are compelling some investors to adjust their view of buying stocks compared against assets perceived as risk-free like government bonds.
The Dow Jones Industrial Average
was down 0.3% at 34,763, with the blue-chip index at risk of snapping a four-session rise. The S&P 500 index
was down 0.7% at 4,413, while the Nasdaq Composite Index
was trading over 1% lower at 14,814.
In other news, Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen are set to appear before a Senate panel at 10 a.m. Eastern Time to discuss the state of the economic recovery amid the coronavirus pandemic.
Yellen said Tuesday that the Treasury Department is likely to exhaust extraordinary measures to keep from defaulting on its debt if Congress has not acted to raise or suspend the debt limit by Oct. 18. “At that point, we expect Treasury would be left with very limited resources that would be depleted quickly,” she said in an update sent to Congressional leaders.
Meanwhile, energy markets are another source of concern, as Europe and Asia fight for natural-gas supplies. The lead natural-gas contract NG00 has surged 138% this year.
In corporate news, shares of Ford Motor Co. F were up after the auto maker announced plans to spend $11.4 billion to build “mega-campuses” in Tennessee and Kentucky, to help supply new manufacturing capacity for electric vehicles.