Dow drops 540 points, Nasdaq falls 2.6% as 10-year yield rises to 2-year high
The major averages fell sharply Tuesday after Goldman Sachs reported disappointing earnings and as government bond yields hit Covid-era highs.
The major averages fell sharply Tuesday as government bond yields hit Covid-era highs and after Goldman Sachs reported disappointing earnings.
The Dow Jones Industrial Average slipped 543.34 points, or 1.5%, to close at 35,368.47.
The S&P 500 fell 1.8% to 4,577.11, and the Nasdaq Composite declined 2.6% to 14,506.90, hitting its lowest level in three months.
The technology-focused Nasdaq sits more than 10% from its most recent high and closed below its 200-day moving average for the first time since April 2020. The small-cap benchmark Russell 2000 slid nearly 3.1%.
U.S. markets were closed Monday due to the Martin Luther King Jr. holiday.
Goldman Sachs shares dropped nearly 7% on Tuesday after the bank missed analysts’ expectations for its fourth-quarter earnings. Goldman’s operating expenses surged 23% on increased pay for Wall Street employees.
Meanwhile, Treasury yields posted strong gains. The closely watched 2-year yield broke above 1% for the first time since February 2020, the month before the pandemic declaration that sent the U.S. economy into recession. The 2-year Treasury is seen as a gauge of where the Federal Reserve will set short-term borrowing rates.
Rates rose along the yield curve, with the benchmark 10-year note topping 1.87%, its highest since January 2020.
The 10-year yield started 2022 around 1.5%.
