Dow Drops 444 Points Under Pressure From Bond Market

Most US stocks fell Wednesday as Wall Street contended with the downside of a US economy that keeps powering through its many challenges.

• The S&P 500 fell 19.30 points, or 0.3%, to 7,651.54 to close out its third losing month in the last four.
• The Dow Jones Industrial Average fell 443.87 points, or 0.9%, to 50,906.05.
• The Nasdaq composite rose 63.52 points, or 0.2%, to 26,861.06.

Stocks turned lower after reports suggested the US economy was even stronger during the spring than earlier thought, the AP reports. That helped yields remain high in the bond market, which in turn kept up the pressure on stocks.

The day began with gains for stocks following an encouraging report that said inflation wasn’t as bad across the United States last month as economists expected. Shorter-term Treasury yields fell as traders pared bets that the Fed will raise its main interest rate next month to get inflation further under control. They now see just a 37% chance of that, down from the coin flip’s chance seen a day earlier, according to data from CME Group. That helped the yield on the two-year Treasury briefly fall toward 4.83% before it pulled back to 4.89%, where it was late Tuesday.

• But longer-term yields rose in the bond market. That’s in part because worries about high inflation are just one of the reasons longer-term yields have jumped in the United States and around the world. The seemingly solid US economy is another. Besides Wednesday’s better-than-expected report on the overall US economy, another update said growth in business activity in the Midwest was also stronger than economists expected.

Other factors sending Treasury yields higher are also continuing to churn, including worries about the big debt loads that Washington and other governments worldwide are supporting. Oil prices, meanwhile, rose in their latest swings amid uncertainty about when the war with Iran will allow the flow of crude to be fully restored. Brent crude, the international standard, climbed 1.9% to settle at $98.03 per barrel. The 30-year Treasury yield, which takes into account expectations for inflation and economic growth many years down the line, climbed to 5.64% from 5.59% late Tuesday.

On Wall Street, Cal-Maine Foods dropped 0.7% after the country’s largest egg company reported a larger loss for the latest quarter than analysts expected. Helping to limit the market’s losses was Hewlett Packard Enterprise, which rose 3.9%. It increased its forecast for revenue from its networking business, which is benefiting from the boom in artificial-intelligence technology. MongoDB climbed 3.4% after the database company’s board boosted its program to send cash to shareholders by $1 billion through buybacks of its own stock. That helped MongoDB recover some of its sharp loss from earlier in the week, after it said Chirantan “CJ” Desai was stepping down as CEO for a senior role at Meta Platforms.