As Treasury yields eased from levels that were not seen for a decade, stocks rallied Monday to start the new month and quarter.
The Dow Jones Industrial Average was up 681 points higher, or 2.3%. It gained as much as 700 points at one point. The S&P 500 rose 2.1%, after falling Friday to its lowest level since November 2020, and the Nasdaq Composite gained 1.6%.
The yield on the 10 year U.S. Treasury note went over to trade at around 3.7%, after topping 4% at one point last week.
It's pretty simple at this point, 10 year Treasury yield goes up, and equities likely remain under pressure, Raymond James Tavis McCourt said. It comes down and equities rally. Wall Street is coming off a tough month, with the Dow and S&P 500 notching their biggest monthly losses since March 2020. The Dow closed below 29,000 for the first time since November 2020.
The Dow lost 8.8% in September, while the S&P 500 and Nasdaq Composite lost 9.3% and 10.5%.
The Dow fell by 6.66% for the quarter to notch a three-quarter losing streak for the first time since the third quarter of 2015, and dropped to a three-quarter losing streak for the first time since the third quarter of 2015. Both the S&P and Nasdaq Composite fell 5.28% and 4.11% to finish their third consecutive negative quarter for the first time since 2009.
As the new quarter begins, all S&P 500 sectors are 10% off their 52 week highs. Nine sectors finished the quarter in negative territory.
In the fourth quarter, elevated inflation and a Federal Reserve intent on bringing surging prices to a halt regardless of what it means for the economy will likely continue to weigh on markets, according to Truist spokesman Keith Lerner. He added that oversold conditions make the market vulnerable to a bounce on good news, as well as making it vulnerable to a short-term bounce on good news.
I think we could be set up for some sort of reprieve but the underlying trend is still a downward trend and choppy waters to continue, according to Lerner.