Treasury yields touch highest since 2008

Stocks moved lower on Wednesday as Wall Street struggled to extend its rally amid a sharp rise in Treasury yields. The Nasdaq Composite lost 0.85% to close at 10,680.51. The S&P 500 ticked down 0.67% to 3,695.16. The Dow Jones Industrial Average slipped 99.99 points, or 0.33%, to finish the day at 30,423.81. The losses ended a two-day winning streak, though all three averages are still up for the week.

Earnings season is having a solid start, but Treasury yields remained elevated on Wednesday, suggesting that recession fears are still intact. The 10-year Treasury yield traded as high as 4.136%, the highest level since July 23, 2008.

The 10-year Treasury is the risk-free rate that basically the majority of other asset classes in the world are priced off. This fact is creating choppy market conditions and further market volatility.

The impact of higher rates is shown sharply in the housing market, where housing starts fell faster than expected in September, the Census Bureau said on Wednesday.

The rate leap also weighed on more speculative tech stocks. Among the biggest losers in the Nasdaq were Chinese tech stocks JD.com, falling more than 7%, and Baidu, sinking 8.8%.