US stocks fell for a third straight day amid rising bond yields

The main index of the U.S. stock market S&P 500 and blue-chip index Dow Jones at the end of trading on Ma 19 fell by 0.7%. Technology index Nasdaq Composite fell by 0.8%.

Stocks ended lower for a third trading day despite a drop in the cost of oil. On Tuesday, July Brent crude futures fell 0.6% after U.S. President Donald Trump said he would refrain from a new strike on Iran at the request of Gulf leaders. However, Brent crude has risen more than 20% over the past month and now costs more than $111 a barrel.

Pressure on stocks is being exerted by the sell-off in the bond market, Barron's explains. On Ma. 19, the yield on 30-year, longest-dated U.S. Treasury bonds rose seven basis points to 5.20%. The last time such yields were seen in 2007 on the eve of the global financial crisis. Bond markets in Europe and Japan also fell.

The bond sell-off was caused by investors' growing fears about inflation. The sharp rise in energy prices due to the war in the Middle East has increased the likelihood that central banks, including the Federal Reserve, will have to raise interest rates, notes Bloomberg. At the trading on Ma. 19 traders estimated the probability of raising the Fed's rate by the end of the year at 85%. At the same time on Ma. 1, the markets did not put the probability of a rate hike in the prices at all.

Investors are hoping that Nvidia's quarterly report will end the market's misery, writes Barron's. The tech giant will release its results on Ma. 20 after the close of trading.

"That Nvidia will report earnings per share and revenue above expectations is almost as inevitable as death and taxes," wrote analysts at Bespoke Investment Group.

This article was AI-translated and verified by a human editor