One fear in markets is that a jump in interest rates will weigh on economic growth by increasing the cost of mortgages and other loans (Daniel ROLAND)
New York (AFP) – Wall Street stocks sank further in mid-session trading on Thursday on worries about the sharp rise in US Treasury bond yields and growing tensions between Washington and Beijing.
Around 1645 GMT, the tech-rich Nasdaq Composite Index stood at 7,874.07, down 1.9 percent.
The Dow Jones Industrial Average and S&P 500 both fell 0.9 percent, with the former at 26,589.44 and the latter at 2,897.89. The Dow finished at records in the last two sessions.
Several large tech names were especially weak, with Google parent Alphabet down 3.1 percent, Facebook 2.5 percent and Tesla Motors 4.7 percent.
The declines came as the yield on the 10-year US Treasury bond rose to 3.19 percent after sharply increasing on Wednesday.
Karl Haeling of LBBW said the market has been expecting higher yields in light of strong growth and Federal Reserve interest rate hikes. But the speed of increase jolted investors.
“What upset people was the speed of the increase in yields,” he said.
One fear in markets is that a jump in interest rates will weigh on economic growth by increasing the cost of mortgages and other loans. A sudden movement could also boost the dollar and lead to an exodus of money from emerging markets.
Haeling also said investors were perturbed at the prospect of a “growing cold war” between the United States and China amid a lingering trade dispute.
Adding to that point of division, the White House has also accused Beijing of meddling in US politics, an accusation amplified by Vice President Mike Pence Thursday in a speech.
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