From CNBC · Jeff Marks · · 1m 50s
Stocks fall as bond yields hit 19-year high
Strong economic data spooks markets into expecting more rate rises, but Boeing bucks the trend ahead of trade talks.
In brief
Strong economic data spooks markets into expecting more rate rises, but Boeing bucks the trend ahead of trade talks. Stock markets dropped Wednesday as bond yields spiked to a nineteen-year high on strong economic data, raising expectations the Federal Reserve will raise interest rates, though Boeing rose on union…
Bond yields spike to 19-year high
The ten-year Treasury yield jumped above five point one two percent Wednesday, its highest level in nineteen years, after strong economic data triggered a bond selloff.
Manufacturing data beats expectations
The S and P Global US Flash PMI manufacturing index jumped to fifty-seven in September from fifty-three point nine in August, marking its greatest improvement since May twenty twenty-two.
Markets fear Fed rate hikes
Investors saw the strong economic data as bad news because it gives the Federal Reserve more cover to raise interest rates to temper growth and stamp out stubborn inflation.
Rate rise odds jump sharply
According to the CME FedWatch tool, there is now a fifty-seven percent probability the Fed raises rates by twenty-five basis points at each of its final two meetings of twenty twenty-six, up from thirty-eight percent one week ago.
S&P 500 and Nasdaq both fall
The S and P five hundred dropped nearly one percent while the Nasdaq fell more than one percent Wednesday. Only energy and industrials sectors were in the green.
Boeing rises on union backing
Boeing shares rose more than one point five percent after the union representing Boeing's engineers and technical employees recommended members accept the company's latest contract offer, avoiding a potential strike before the October ninth deadline.
Trump-Xi summit could help Boeing
Boeing stock may also be getting a boost from optimism ahead of Thursday's White House summit between Trump and Chinese President Xi Jinping, when Boeing could come up in trade discussions.
The main idea
Stock markets dropped Wednesday as bond yields spiked to a nineteen-year high on strong economic data, raising expectations the Federal Reserve will raise interest rates, though Boeing rose on union backing for a contract deal.
