Wednesday marked the first trading day of March. All the major averages finished lower, as bond yields rocketed higher, with the yield on the 10-year Treasury note hit 4% for the first time since November.
The tech-heavy Nasdaq Composite led Wednesday’s losses, falling 0.66%, while the S&P 500 dipped 0.47%. The Dow Jones Industrial Average added just 5.14 points. The S&P 500 and the Nasdaq are on pace for their second consecutive losing week for the first time since December. The Dow, meanwhile, is on track for its fifth consecutive negative week, a first since May 2022.
The rise in bond yields and concerns of a potentially larger-than-expected hike from the Federal Reserve have fueled investor concern in recent days, putting a dent in the early 2023 rally.
“You have a situation where if rates stay high, multiples need to come in, and it likely leads to a further downfall down the line in the economy because there is a lag effect to these rate hikes,” Cantor Fitzgerald’s Eric Johnston said on CNBC’s “Closing Bell: Overtime” on Wednesday. “And then once the economy falls, then earnings would have a fairly long way to go to the downside.”
Earnings season continues Thursday with results from Broadcom, Costco and Marvell Technology.
On the economic front, investors await jobless claims, and unit labor costs and productivity data. A speech from Fed Governor Christopher Waller is also slated for Thursday afternoon.