- US stocks declined following a rise in Treasury yields on Thursday
- The Dow Jones dropped 0.83%, losing 445.28 points early in trading
- The S&P 500 fell 0.30%, down 21.24 points during the session
US stocks fell on Thursday as Treasury yields reversed the previous session's decline, putting pressure on equities after the US Treasury Department's announcement to increase its debt buyback operations failed to sustain the bond market's relief.
The Dow Jones Industrial Average fell 0.83%, or 445.28 points, shortly after the opening bell. The S&P 500 declined 0.30%, or 21.24 points, while the Nasdaq Composite dropped 0.34%, or 90 points.
Home Depot fell nearly 3%, while Nike Inc, Salesforce and Amazon fell over 1%. On the other hand, McDonald's Corp, NVIDIA Corp and Walt Disney shares were up nearly 1%.
Walmart shares also weighed heavily on the broader market. The retail giant fell more than 7% after its US comparable sales came in below analyst expectations. The company also provided adjusted earnings guidance for the third quarter and full year that fell short of market expectations.
Treasury yields moved higher on Thursday after falling sharply in the previous session. The rebound came after the Treasury Department said it would at least double repurchases of 10-, 20- and 30-year government debt over the next few months. The yield on the 10-year Treasury note rose more than 5 basis points to 4.704%, while the 30-year Treasury yield climbed 6 basis points to 5.254%. The move came after the 30-year yield surged to its highest level in nearly 20 years earlier this week, highlighting continued pressure in the long-end of the US bond market.
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Higher bond yields weighed on risk appetite as investors reassessed the outlook for borrowing costs and equity valuations. The rise in yields also comes after Wall Street's recent volatility was driven by a sharp sell-off in longer-dated government bonds.
Oil prices provided another headwind for stocks as crude gained amid rising tensions between Iran and the US. US President Donald Trump said in a Truth Social post late Wednesday that the US would begin what he described as the "most crushing economic operation ever taken against any country" against Iran, calling it "Economic Warfare and Isolation on an unprecedented scale."
West Texas Intermediate crude futures climbed around 3% to above $88 per barrel, while global benchmark Brent crude futures rose around 3% to above $94 per barrel. Higher oil prices could add to inflationary pressures and complicate the outlook for interest rates, creating an additional challenge for equity markets already dealing with elevated bond yields.
Thursday's decline follows a stronger session on Wall Street. The S&P 500 snapped a three-session losing streak on Wednesday after longer-dated Treasury yields pulled back from multi-year highs. The decline in yields came after the government announced plans to ease pressure in the bond market through larger debt repurchases.
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