Dow Tanks 500 Points and the 10-Year Yield Just Hit a Level Not Seen Since 2007

TLDR

• The Dow Jones Industrial Average fell 500 points, or about 1%, on Tuesday
• The 10-year Treasury yield briefly rose above 5% for the first time since 2007
• WTI crude oil hit $103 a barrel, with Brent crude at around $102
• The Federal Reserve is expected to raise interest rates at its Wednesday meeting
• Chip stocks bucked the trend, with the iShares Semiconductor ETF rising 1%

US stocks fell Tuesday as rising oil prices and surging bond yields rattled investors ahead of the Federal Reserve’s rate decision on Wednesday.

The Dow Jones Industrial Average dropped 500 points, or roughly 1%. The S&P 500 fell 0.58% and the Nasdaq Composite dropped around 0.83%.

Bond Yields Hit Highest Level Since 2007

The 10-year Treasury yield briefly crossed 5% overnight, a level not seen since 2007. While it pulled back slightly, the move spooked investors already on edge about inflation and government spending.

Rising yields make borrowing more expensive for companies and consumers. They also tend to make stocks less attractive compared to bonds.

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