Overnight the US markets took a dive on the back of higher interest rates with the S&P 500 and the Dow marking their biggest daily declines since Feb. 8, and technology stocks at the center as investors jettisoned more risky assets. Plus, Investors were also worried about the impact of trade tensions on corporate profits and Hurricane Michael’s landfall in Florida adding to the uncertainty.
The U.S. 10 Year Treasury yields rose again in extension of a trend over the last few weeks fuelled by solid U.S. economic data that reinforced expectations of multiple interest rate hikes over the next 12 months.
It ended at 3.17, down 1.58% on the day, while the 3-month Treasury was up 0.12% to 2.27.
The CBOE Volatility Index (VIX), Wall Street’s “fear gauge,” rose 7 points, or nearly 44 percent, to 22.96, going above 20 for the first time since April 11 and hitting its highest close since April 2.
The Nasdaq ended at 7,422 and registered its biggest daily drop since June 24, 2016, hurt by technology stocks which had their biggest one-day drop since August 2011.
The S&P 100 ended the day down 3.41 percent, to 1,239, nearly 5% off its recent September highs.
The Dow Jones Industrial Average (DJI) fell 831.83 points, or 3.15 percent, to 25,598.74, a reversal from recent highs.
Gold however hardly moved, sitting at 1,198 almost flat for the day.
The Aussie slide further against the US dollar, and is currently silting at 70.59.
Expect more bad news from the local market today as uncertainty reigns supreme. It’s too soon to tell is this is another blip, of a more fundamental swing in confidence, but we think the higher US rates are the key. So expect more falls ahead.
The local market opened lower.
