NEW YORK (AP) — Wall Street is sinking on Tuesday as rising pressure from the bond market pulls U.S. stocks further from their records.
Big Tech companies led the market lower. They’ve been soaring for years on expectations that they’ll continue to dominate the economy, but they also shot so high that critics say their prices became too expensive.
The overall stock market felt pressure from rising yields in the bond market, where the 10-year Treasury yield climbed to 4.27% from 4.23% late Friday. When bonds are paying more in interest, investors are less willing to pay high prices for stocks.
Longer-term bond yields are on the rise around the world, in part because of worries about how difficult it will be for governments to repay their growing mountains of debt.
Treasury yields briefly trimmed their gains after a report on Tuesday said U.S. manufacturing shrank by more last month than economists expected. Many companies told the Institute for Supply Management that tariffs are continuing to make conditions chaotic.
“Too much uncertainty for us and our customers regarding tariffs and the U.S./global economy,” one company in the chemical products industry said, while noting that orders across most product lines have weakened.
The worse-than-expected data on manufacturing could give the Federal Reserve more leeway to cut its main interest rate for the first time this year at its next meeting in a couple of weeks. That’s the widespread expectation among traders, though several economic reports coming this week could change things.
The highlight for the week is coming on Friday, when economists expect a report to show that U.S. employers upped their hiring by a bit last month. Last month’s weaker-than-expected jobs report raised worries about the economy and cranked up expectations for coming cuts to rates by the Fed.
One of the companies will include shelf stable meals and include brands such as Heinz, Philadelphia cream cheese and Kraft Mac & Cheese. The other will include the Oscar Mayer, Kraft Singles and Lunchables brands. The official names of the two companies will be released later.
In stock markets abroad, indexes slumped across Europe, with Germany’s DAX losing 2.3%. That followed a more mixed finish in Asia, where indexes rose 0.9% in Seoul but fell 0.5% in Hong Kong.
