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Rising bond yields continued to stymie the stock market on Thursday after the U.S. House of Representatives narrowly passed President Donald Trump’s tax-and-spending bill.
The Dow Jones Industrial Average was down 112 points, or 0.3%. The S&P 500 was down 0.1%. The Nasdaq Composite was up 0.1%.
The yield on the 30-year Treasury note was up to 5.12% after spiking as high as 5.15% earlier in the morning.
Weak demand for an auction of 20-year notes on Wednesday sent bonds and stocks tumbling on Wednesday. Andrew Brenner, head of international fixed income at NatAlliance Securities, writes that the auction, paired with the passage of the budget bill, has led to higher long-term rates as so-called “bond vigilantes” sell in response to deficit concerns.
“The vigilantes are very much entrenched in the long end of all bond markets from Europe to Japan to the US,” writes Brenner. “[Treasury Secretary Scott] Bessent has his work cut out for him.”
The S&P on Wednesday snapped a month-long streak of not falling 1% or more.
“There’s clear risk given the one-sided advance the last few weeks, but with bullish patterns still in play and the SPX having built up a big cushion, it can afford to back and fill again now,” writes Frank Cappelleri, founder of technical analysis firm CappThesis. “It’s the first gut punch in four weeks, and the market must prove it can absorb it.”
Corrections & Amplifications: The S&P 500 started the day in the red, while the Nasdaq Composite opened higher. An earlier push notification incorrectly said stocks opened lower.
