U.S. stocks extended their decline Monday and the Dow entered bear-market territory, as investors continue to worry about slowing global growth and the Fed’s ongoing efforts to tame inflation.
Meanwhile, 10-year U.S. Treasury yields rose to 3.878%, their highest level since 2010. By Monday’s close, the Dow had fallen 330 points, while the S&P 500 and Nasdaq dropped 38 and 65 points, respectively. The TSX logged its fifth straight day of losses, falling 154 points.
Market confidence was also shaken somewhat this week after the British government last Friday unveiled the country’s biggest tax cuts since the early 1970s, which rattled investors and sparked the biggest one-day selloff of the pound since March 2020.
On Tuesday the Dow sank deeper into a bear market, while the S&P 500 recorded its lowest close in almost two years. The Nasdaq was up slightly, adding 27 points, while the TSX finished lower for a sixth straight session. Meanwhile, 10-year U.S. Treasurys climbed even higher.
U.S. and Canadian stock indexes finally regained ground on Wednesday, and longer-term bond yields fell sharply after the Bank of England pledged to buy U.K. government bonds with long maturities “on whatever scale is necessary.” By Wednesday’s close, the Dow had jumped 549 points, while the S&P 500 and Nasdaq climbed 72 and 222 points, respectively. In Canada, the TSX added 341 points.
Any optimism for a sustained rally vanished on Thursday, however, as U.S. and Canadian markets fell sharply once again on concerns over global growth and inflation. By the end of Thursday’s trading, the Dow had plunged 458 points, while the Nasdaq and TSX fell 314 and 207 points, respectively.
Finally, surging yields and mounting volatility in government bond markets are intensifying fears on Wall Street that this year’s wild swings could further destabilize financial markets.
Losses Keep Mounting for North American Indexes
For the four trading days covered in this report, the Dow lost 363 points to close at 29,227, the S&P 500 dropped 52 points to settle at 3,641, while the tech-heavy Nasdaq sunk 131 points to close at 10,737. In Canada, the TSX lost 39 points to end at 18,442.
source https://rosenbergdri.ca/dow-enters-bear-market-u-k-tax-cuts-rattle-bond-markets/
Dri Financial Group 