NASDAQ 100, Dow Jones, S&P 500 News: Investors Brace for Turbulence Amid Yield Surge

Highlights

• Stocks tumble as Treasury yields hit a 16-year high, rattling investor confidence.
• August job openings survey reveals a tight labor market with 9.6 million available roles, outpacing estimates.
• Short-term market outlook remains bearish, influenced by soaring yields and forthcoming economic reports.

Market Nerves Frayed by Skyrocketing Treasury Yields

Stocks tumbled on the opening onTuesday, rattled by a steep ascent in Treasury yields to 16-year highs. The Dow Jones Industrial Average surrendered 226 points, shrinking by 0.7%, while the S&P 500 and Nasdaq Composite retreated by 0.9% and 1.1%, respectively. The surge in yields coincided with the release of August’s job openings survey, which revealed a tight labor market with 9.6 million available positions, surpassing Dow Jones economists’ estimates of 8.8 million.

Yield Surge Shakes Confidence

The 10-year Treasury yield touched 4.704%, a notable decline from its morning peak of 4.745%, which marked the highest level since August 2007. The 30-year Treasury yield also climbed to 4.874%, its loftiest point since October 2007. This surge in yields has stoked fears among investors, causing them to question the Federal Reserve’s potential for extended tight monetary policy, thereby pressuring equities.

Corporate Earnings Add to Market Strain

McCormick & Company, the seasoning manufacturer, was Tuesday’s biggest loser, plummeting nearly 10% following its quarterly earnings announcement. Other companies like Kellogg, Veralto, and Airbnb also reported losses, decreasing by 8%, 4.1%, and 3.4%, respectively.

Mixed Signals from Washington

Investors had a breather over the weekend as lawmakers in Washington reached a short-term agreement to avoid a government shutdown. However, the market is not yet out of the woods. After a dismal September for stocks, with the S&P 500 shedding nearly 5%, investors are keenly awaiting key economic reports and the onset of the earnings season next week.

Short-Term Outlook: Bearish Sentiment Prevails

The skyrocketing yields are likely to continue acting as a significant drag on equities through year-end unless there’s a reversal. The market appears to be bearish in the short term, as investors remain anxious about the impact of higher yields and are cautious ahead of forthcoming economic data.

Technical Analysis

The current daily price of 4226.45 is positioned between the 200-Day moving average of 4201.95 and the 50-Day moving average of 4441.14. This suggests a rather neutral stance, albeit slightly bearish as the price is closer to the 200-Day MA.

Trend line support is at 4297.00, and the price has recently breached this level, fueling downside acceleration.

With minor support at 4261.72 and main support at 4197.68, these could be the next targets. Main resistance stands at 4448.58, significantly higher than the current price. Market sentiment leans bearish.