The Dow Jones ended the session with losses of 700 points, while the S&P 500 fell 0.8%. The Nasdaq Composite was down 1%, while the Nasdaq 100 index ended 0.7% lower on Thursday.
Bond yields in the US staged a rebound after Wednesday’s Treasury intervention-driven sell-off. The 30-year yield is back at 5.24%, having declined to 5.18% from the highs of 5.33%, while the 10-year is now back to pre-intervention levels of 4.71%, having cooled to 4.63% earlier.
Treasury Secretary Scott Bessent told CNBC in an interview that this is just one among the large toolkit they possess to calm nerves in the bond market. He also added that the maximum buyback size could well be over $4 billion depending upon the market conditions. He also urged investors to focus on market fundamentals and not just trade the headlines.
Crude oil prices continued to remain at elevated levels with Brent Crude briefly crossing the mark of $94 a barrel before closing just below that. The West Texas Intermediate (WTI) is above $86 a barrel, although it has cooled off slightly this morning in early Asia trade after Bessent said that the US may not need to resume a full scale operation in Iran as their economic sanctions will be the “greatest coordinated economic isolation in the history of the world.”
Bessent will detail the sanctions next week on Monday.
Markets on Thursday were also impacted by a sharp fall in shares of Walmart, the world’s largest big-box retailer, and Alibaba, both of which reacted to their quarterly results.Walmart fell 9% to clock its biggest single-day drop in over four years despite having marginally raised its guidance, Alibaba fell 5% after AI spending led to its profitability taking a hit during the quarter gone by.
While there is no important macro data point lined up for today, investors will continue to watch for developments in West Asia and the subsequent impact on crude oil prices, along with the movement in the bond yields.
