(Bloomberg) — Stocks fell, oil slumped and Treasury yields touched some of the highest levels in more than a year amid concern the Federal Reserve risks letting inflation accelerate.
Losses accelerated late afternoon in the S&P 500 after the price of crude oil fell by the most since September, dragging down the energy sector. Swings in asset prices picked up Thursday as they often do around major expirations of options and futures contracts, such as tomorrow’s ‘quadruple witching’ event. The tech-heavy Nasdaq 100 tumbled as investors exited growth favorites such as Tesla Inc., Apple Inc. and Microsoft Corp.
“We’re seeing a pattern where an uncomfortable spike in the 10-year Treasury reminds equity investors that their tech stocks are trading well above average,” said Mike Bailey, director of research at FBB Capital Partners.
Ten-year Treasury yields climbed to 1.75% for the first time since January 2020, while the 30-year breached 2.5% for the first time since August 2019 in the wake of Wednesday’s Federal Reserve meeting. Fed Chairman Jerome Powell’s apparent willingness to keep pumping support into the economy and let it run hotter has spurred bets on faster growth and inflation, sending market expectations of price pressures to multi-year highs.
The dollar rose even after initial jobless claims unexpectedly rose last week to the highest since mid-February.
Oil plunged by more than 6% as vaccination efforts in some parts of the world stalled, casting uncertainty over the speed of an economic recovery and a full rebound in global oil demand. West Texas Intermediate crude futures are headed for the longest stretch of daily losses in more than a year.
Read: Treasury Yields Top 1.75% After Powell Spurs Bets on Inflation
In Asia and Europe, stocks were boosted by lingering enthusiasm from the Fed’s outlook for stronger growth. Automakers and banks, which tend to outperform during cyclical upswings, were higher in Europe. Japan’s Topix jumped past the 2,000 mark for the first time since 1991, becoming the region’s top-performing major equity index this year.
Japan’s government bond yields rose on a Nikkei report that the Bank of Japan is considering widening the trading range around the 10-year target, which could spur concerns about policy tightening.
These are some key events this week:
Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.
These are some of the moves in markets:
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