new York
Cnn
–
Actions, bonds and the dollar dropped on Wednesday as concerns are mounted concerning the first status of American assets.
The DOW closed below 817 points, or 1.91%. The wider S&P 500 slipped by 1.61% and the Nasdaq composite rich in technology dropped by 1.41%. The three main indexes each displayed their worst day in a month.
The shares have decreased sharply and the obligations sold after an auction at 1 pm for the 20 -year cash tickets which experienced a low request and were “disappointing”, according to Chip Hughey, CEO of fixed income at Truist Advisory Services.
While the 20 -year -old Treasury note generally attracts less attention than 10 -year -old tickets, all eyes have been on the perception of investors towards treasury bills since Moody’s lowered American public debt.
The Treasury sold $ 16 billion in 20 -year bonds, and the auction has settled with a 20 -year -old treasury return on 5%, reporting that investors demand higher rates to hold American debt. The auction has settled with a high yield of 5.047% compared to 4.83% at auction of last 20 years, in February.
The low demand for American treasury bills comes while Wall Street is already concerned about the potential for the “large and magnificent” tax bill of President Donald Trump to add to the deficit and put pressure on the burden of the federal debt at a time when there is increased uncertainty about the status of security of American assets.
Treasury yields have pushed above in recent days after Moody’s announcement on Friday, which has stripped the United States of its last perfect credit rating. Bond prices and gives trade in opposite directions.
The yield on the 10 -year -old treasure note reached 4.59% on Wednesday to reach its highest level since February and the 30 -year -old yield has exceeded 5% to reach its highest level since 2023.
“Although Moody’s decision to demarcate the sovereign credit note from the United States from AAA to AA1 was not surprising, this adds the emphasis on real fingering problems: the growing deficit of the United States and the debt burden,” said Hughey.
Higher bond yields can also attract investors and keep them away from other assets, which puts pressure on the stock market.
The actions were lower on Wednesday morning while the Republicans of the Congress tried to advance the Trump tax bill.
“The recent budgetary deliberations in Washington do not offer many investors worldwide that these challenges are incorporated into the decision -making process,” said Hughey.
The ratio of federal debt to gross domestic product, or the total value of goods and services produced in the economy, was 123% in 2024, against 104% in 2017, according to the Treasury department.
“We are now talking about deficits and a national debt / GDP ratio which will be really unprecedented, with the exception of recent recession times,” said Alan Auerbach, economics professor at UC Berkeley, in CNN.
American actions came from a red session. The S&P 500 Tuesday has successfully completed a sequence of six -day victories. Although the S&P 500 has vacillated this week, it is up 17% compared to its lowest point this year after marking a brutal rebound last month.
The fear of Wall Street, the CBOe volatility index, increased by more than 15%. The US dollar index, which measures the dollar strength compared to six large foreign currencies, slipped 0.5%.
Bitcoin reached a record of all time above $ 109,400 Wednesday morning before associating the gains and negotiating around $ 107,000. The cryptocurrency, which is very volatile, has increased by more than 40% since the drop just below $ 75,000 in early April.
