Wall Street Stock Selloff Gathers Pace as T-Yields Climb

US stocks fell across the board and Treasury yields surged amid a ramp-up in speculation that central banks will have to boost interest rates sooner than earlier anticipated.

All but one of the 11 industry groups in the S&P 500 fell, while the Dow Jones Industrial Average dropped to the lowest level this year. The Nasdaq 100 sank more than 2%, with Apple Inc. and Meta Platforms Inc. contributing the most to losses. Goldman Sachs Group Inc.’s worse-than-expected fourth-quarter trading revenue weighed on banks, while Microsoft Corp. retreated, spending $69 billion to buy Activision Blizzard Inc. Higher oil prices helped lift energy stocks.

Treasuries fell across the curve, pushing yields up to levels last seen before the pandemic roiled markets. The moves seeped into other countries, with benchmark German yields rising to within one basis point of turning positive for the first time since May 2019.

Higher interest rates are going to be here to stay and that has to factor into everyone’s decisions; not just those that are borrowing capital but mostly in terms of valuations. So those super high-flying narrative-driven tech stocks are going to continue to take a beating.

Oil surged to the highest level in seven years, underscoring the inflation challenges facing the Federal Reserve. Meanwhile, a gauge of New York state manufacturing slumped in January as measures of orders and shipments retreated sharply, suggesting the omicron variant of the coronavirus caused a pullback in activity.