Losses in the market accelerated in early afternoon after remarks from Federal Reserve Chair Jerome Powell fueled investor worries.
The benchmark 10-year Treasury yield spiked to 1.55 per cent after Powell’s comments. It still held below last week’s one-year high of 1.614 per cent.
Powell did not point to changes in the Fed’s asset purchases to tackle the recent jump in yields.
“The market is perhaps hoping that the Fed may make some adjustments in the composition of their quantitative ease and yield curve control,” said Kevin Flanagan, head of fixed income strategy at Wisdomtree in New York.
“The market would like to see the Fed perhaps come out and say maybe they would begin buying more longer duration and buying less shorter duration rather than the mix they’re doing at the present time. So there may be some disappointments there.”
The S&P 500 technology index, which has been sensitive to rising yields due to valuation concerns, fell 2.3 per cent, more than any other S&P 500 sector on the day, while energy gained 2.5 per cent, leading sector gainers and extending recent strong gains.
The Nasdaq is now down 1.3 per cent for the year to date.
