Stocks Tank as Weak Treasury Bond Sale Boosts Yields – US Market Wrap

Wall Street’s concerns about a ballooning deficit that threatens America’s status as a safe haven were reflected in a $16 billion Treasury sale that received low demand, with stocks, bonds, and the dollar all falling.

Treasuries were hit following a weak auction of 20-year bonds, whose 5% coupon rate was the highest since the tenor was reintroduced in 2020. Long-term debt bore the brunt of the selling, with 30-year yields rising 11 basis points to their highest since October 2023. After nearly erasing losses, the S&P 500 fell more than 1.5%. The dollar fell against most major currencies. Bitcoin’s advance slowed, but it was still on track to set a new record.

Traders have been betting that long-term bond yields will rise due to concerns about the United States’ growing debt and deficits, with Moody’s Ratings downgrading the country’s credit rating to below the top triple-A level on Friday. For many, the message was clear: Unless America’s finances are in order, the perceived risks of lending to the government will increase.

The White House increased pressure on Republicans on Wednesday, urging them to quickly approve Trump’s signature tax bill, claiming that failure to do so would be the “ultimate betrayal.”

The S&P 500 dropped 1.6%. The Nasdaq 100 declined 1.3%. The Dow Jones Industrial Average declined 1.9%.
The 10-year Treasury yield rose 10 basis points to 4.59%. The dollar fell 0.3%.