Wall Street selloff accelerates as Dow loses 400 points on interest rate threat: Live updates

stocks fell on Tuesday as investors saw Treasury yields hit record highs in the last 16 years.

The Dow Jones Industrial Average lost 400 points or 1.2%. The S&P 500 lost 1.3% and the Nasdaq Composite lost 1.7%.

stocks hit session lows as yields continued to rise following the release of the August jobs survey, signaling continued tensions in labor markets. The study found 9.6 million job vacancies during the month. Meanwhile, economists surveyed by Dow Jones expected 8.8 million jobs.

Veralto and the spice manufacturer McCormick & The Company led losses in the broader market index on Tuesday, with shares of both companies falling 9% or more. Cruise line Carnival fell 6.3%, followed by Airbnb and Viatris, down more than 5%.

The 10-year Treasury yield last traded at 4.756%, hitting its highest level since August 15, 2007. Benchmark yields rose last month as investors weighed the possibility of long-term tightening by the Federal Reserve. The 30-year Treasury yield rose to 4.891%, its highest level since October.17, 2007.

Investors have been worried lately about maintaining higher interest rates, fearing that tightening monetary policy could push the economy into recession. As a result, government bond yields rose to levels not seen in more than a decade.

Rising yields represent “a significant headwind for stocks,” says Alex McGrath, chief investment officer at NorthEnd Private Wealth. “If things don’t remain stable or start to change, that will be a major headwind for all industries at the end of the year,” McGrath said. Joseph Cusick, portfolio specialist at

Calamos Investments noted that “higher interest rates are not necessarily bad for the stock market, especially if they are coupled with more robust economic activity, which has a positive impact on the earnings outlook.”

“Higher interest rates will “However, they are more problematic for the stock market when they form the basis for safe trading in an uncertain environment,” Cusick added.

Wall Street is ending a mixed session after Washington lawmakers reached a short-term deal over the weekend that averted a government shutdown.

That means key economic reports – like last month’s payroll reports due on Friday – and the start of earnings reporting season next week are back in the spotlight.

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