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Wall Street panics over high rates: S&P500 hit new two-year low

Wall Street panics over high rates: S&P500 hit new two-year low

For its part, markets were still wary of the pace of interest rate hikes in the United States to quell inflationa concern that has hurt risk assets and buoyed the greenback.

“We could see a short-term bottom,” said Jason Pride, director of private equity investments at Glenmede, adding that some technical indicators suggest the market is a bit oversold.

“However, that bottom may be more of a bear market rally similar to what was experienced earlier this summer,” he added.

Initial gains were reversed after US Federal Reserve officials reminded investors that the central bank’s priority is to control domestic inflation.

In turn, 10-year US Treasury bond yields rose to a more than 12-year high.as investors braced for higher interest rates for longer, following comments from Federal Reserve officials reaffirming their commitment to stamp out inflation.

The US 10-year yield hit 3.974%, the highest since April 2010, before rising 8.3 basis points to 3.9717%. Since the beginning of August, the 10-year yield has soared 145 basis points.

30-year yields also hit a milestone on Tuesday, rising to 3.81%, the highest since January 2014. The yield then gained 10.5 basis points to 3.799%.

“It feels like we’re in the middle of a yield thaw. Valuations are getting to the point of looking relatively attractive”said Joseph Kalish, chief global macroeconomics strategist at Ned Davis Research.

Source: Ambito

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