Stocks rose on Monday to start the new month and quarter, as Treasury yields tumbled from levels not seen in nearly a decade.
The Dow Jones Industrial Average jumped 646 points, or 2.3%. The S&P 500 is up 2.1% after falling on Friday to its lowest level since November 2020. The Nasdaq Composite is up 1.6%.
These moves came as a yield on 10-year US Treasuries rolled to trade at around 3.7%, having topped 4% at one point last week.
“It’s very simple at this point, the 10-year Treasury yield is going up and stocks are likely to remain under pressure,” said Raymond James’s Tavis McCourt. “It’s going down, and the stock is going up.”
Wall Street is going through a tough month, with the Dow and S&P 500 posting their biggest monthly losses since March 2020. The Dow also closed below 29,000 on Friday for the first time since November 2020.
The Dow Jones fell 8.8% in September, while the S&P 500 and Nasdaq Composite lost 9.3% and 10.5%, respectively.
For the quarter, the Dow Jones fell 6.66% to post a streak of three-quarter losses for the first time since the third quarter of 2015. The S&P and Nasdaq Composite fell 5.28% and 4.11%, respectively, to end their third consecutive negative quarter. For the first time since 2009.
As the new quarter begins, all S&P 500 segments are down at least 10% from 52-week highs. Nine sectors ended the quarter in negative territory.
Trust’s Keith Lerner said that in the fourth quarter, high inflation and a Fed intent on stopping price hikes, no matter what that means for the economy, will likely continue to weigh on markets. He added that oversold conditions make the market vulnerable to a sharp short-term rebound as a result of the good news.
“I think we could be set up for some kind of delay, but the underlying trend at this point is still a downtrend and choppy waters to continue,” Lerner said.