Stocks Wake Up to Fed-Rate Rethink as Yields Surge: Markets Wrap
- S&P 500 slumps 2%; Dow Average erases this year’s advance
- Morgan Stanley’s Wilson calls time on rally for pricey stocks
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A renewed surge in Treasury yields took the wind out of the stock market, with geopolitical tensions and dire forecasts from bellwethers Walmart Inc. and Home Depot Inc. also souring investors’ mood.
Wall Street’s growing fears that the Federal Reserve is nowhere near wrapping up its war against inflation — let alone pivoting — continued to burn bond investors who at one point were betting on rate cuts in 2023. As traders ramped up their Fed wagers, two-year US yields hit the highest since 2007. And the last ones to join the so called “everything rally” — equities — are now giving signs of running out of steam.