Market Snapshot: Dow snaps its longest winning streak since 1987 as strong second-quarter GDP data rattles investors hoping for rate cuts

by | Jul 27, 2023 | Stock Market

U.S. stock indexes finished lower on Thursday, with the Dow Jones Industrial Average snapping a historic winning streak of 13 straight gains, as stocks erased an early advance scored after gross domestic product figures showed the U.S. economy picked up steam in the second quarter. What happened
The Dow Jones Industrial Average
dropped 237.40 points, or 0.7%, to end at 35,282.72

The S&P 500
was off 29.34 points, or 0.6%, to finish at 4,537.41

The Nasdaq Composite
lost 77.17 points, or 0.6%, ending at 14,050.11

The Dow rose 0.2% on Wednesday, its 13th straight session in the green — the longest such winning streak since 1987.

What drove markets U.S. stocks initially benefited from the latest batch of strong earnings reports and economic data on Thursday morning. However, the three major stock indexes reversed early gains to end lower in afternoon trading as bond yields jumped and after a news report said the Bank of Japan will discuss tweaking its yield-curve control policy at a policy board meeting Friday. The BOJ potentially may let long-term interest rates rise beyond its cap of 0.5%, by a certain degree, according to the report. See: Yen strengthens, stocks wobble after report Bank of Japan will discuss tweak to monetary policy The yield on the 2-year Treasury
which is more sensitive to imminent central banks’ move, rose 11.4 basis points to 4.939% from 4.83% on Wednesday, while the yield on the 10-year Treasury 
soared 16.1 basis points to 4.011%, according to Dow Jones Market data. The Bank of Japan began implemented yield-curve control, or YCC, in 2016, a policy that aims to keep government bond yields low, while ensuring an upward sloping yield curve. Under the policy control, the BOJ buys whatever amount of Japanese government bonds they think is necessary to ensure the 10-year yield remains below 0.5%. However, rising inflation and interest-rate hikes by other major central banks around the world, including the Federal Reserve and the European Central Bank, are fueling concern that Japanese yields could climb past the 0.5% threshold. Quincy Krosby, chief global strategist for LPL Financial, told MarketWatch in a phone interview that currency markets were rattled by the news report indicating the BOJ may tweak its policy. The yen strengthened on Thursday afternoon. The U.S. dollar was off 0.6% versus the currency, fetching 139.46 yen

Article Attribution | Read More at Article Source

Share This