Dow, U.S. Stocks Swing Violently as Ten-Year Treasury Yield Hits 15-Month Low

The Dow and broader U.S. stock market traded lower on Wednesday, as sinking bond yields highlighted investors’ concern about global economic health. Meanwhile, the cryptocurrency market swung sharply higher and was last seen approaching its yearly peak, a sign that a bearish-to-bullish trend reversal was looming.

Stocks Slide

Equities survived an extremely volatile session to finish well off their daily lows. The large-cap S&P 500 Index fell 0.5% to 2,805.37. It was down by as much as 1.1%.

Nine of 11 primary sectors tied to the S&P 500 recorded losses. Healthcare posted the biggest slide, falling 0.9%. Energy and information technology stocks also under-performed the benchmark index. Walmart Inc. (WMT) and Chevron Corp (CVX) were the biggest laggards.

Sliding tech shares weighed on the Nasdaq Composite Index, which settled down 0.6% at 7,643.38.

After falling as much as 232 points, the Dow Jones Industrial Average pared losses to settle at 25,625.59, where it was down 0.1%.

U.S. Treasury Yields Fall

U.S. bond yields fell anew on Wednesday, with the benchmark 10-year Treasury yield reaching its lowest level since December 2017. Yields fall when bond prices rise. According to The Wall Street Journal, the 10-year Treasury yield fell to 2.384% from 2.418% on Tuesday.

Movement in the bond market highlights growing uncertainty about the U.S. and global economies as investors seek traditional safeguards against a possible recession. This came to a head Friday when the spread between the 3-Month T-Bill and 10-year note inverted for the first time in 12 years, which was just before the global financial crisis.

As WSJ also noted, an inverted yield curve is no guarantee that a recession is coming. Stocks have often risen for several months after such an inversion, making it more difficult to use history as a guide for future behavior.

Cryptocurrencies Bounce Back

Bitcoin and its altcoin peers rose sharply on Wednesday, rebounding from a bout of profit-taking at the beginning of the week. The cryptocurrency market capitalization, inclusive of bitcoin, altcoins and tokens, approached $143 billion after falling toward $136 billion on Monday. Daily trade volumes surpassed $36 billion, according to CoinMarketCap.

At the time of writing, all major cryptocurrencies had reported gains, with bitcoin clawing back above the psychologically significant $4,000 level. Ethereum’s price gained 3.5% to $139.50. The value of XRP improved 2.4% to $0.3090.

EOS was by far the best performer, climbing more than 16% to $4.30. That was the highest level in over a month. The rally pushed EOS back into fourth spot on the crypto market cap index, overtaking Litecoin.

Cardano also registered double-digit gains, rising 11.3% to $0.0680.

Also read The Bulls are Back: Crypto Markets Approach Yearly Highs after Profit-Taking.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi