It’s a Bit of a Spike
The yield on the 10-year US Treasury note is rising.
Did you know that, even after Federal Reserve Chair Jerome Powell turned this into one big rate-cut watch back in December, market-based interest rates have been rising?It’s true: According to Dow Jones Market Data, the benchmark 10-year US Treasury yield has risen almost 75 basis points through May.
The 10-year yield made its biggest move of the year on Tuesday, jumping 7.1 basis points to 4.524 percent. It was up again, to 4.619 percent, on Wednesday.
It hit a 2024 peak of 4.706 percent on April 25. The 52-week high, 5.022 percent, was set on October 23.
The word on the Street is there were more sellers and buyers on Wednesday because rising market interest rates are starting to wear on investors’, traders’, and speculators’ optimism.
Seems a pretty fair assessment, in the absence of any other compelling rationale.
And you love it as much as we do.
But, understand, when we talk about the Dow falling more than 400 points, because the index is up around 40,000 now, it’s only 1.06 percent.
What’s more impressive, the 400 or the 40,000?
The Dow’s steeper selloff relative to the S&P 500 and the Nasdaq Composite is perhaps explained by UnitedHealth Group $UNH.
The insurer was down 3.76 percent after management cited a potential “near-term disturbance” for Medicaid reimbursement rates in some states.
UNH, which closed at $484.72 on Wednesday, is No. 1 in the price-weighted Dow.
On a day marked by another big deal in the oil and gas patch but also by another soft US Treasury auction, not even Nvidia $NVDA could put things green.
At least we have some incoming data to consider.
The release of initial jobless claims data – a noisy set – this morning at 8:30 a.m. ET is a nice prelude to the release of April PCE Price Index data – which includes the Federal Reserve’s favorite inflation measure – tomorrow at 8:30 a.m. ET.
It won’t be conclusive as far as the Fed is concerned.
But, then again, nor will the April core PCE print.