Dow and S&P 500 Diverge as Bond Yields Rise
Concerns about rising bond yields continue to weigh on investors’ sentiment.
The Dow diverged from the broader U.S. stock market on Monday, as investors continued to evaluate bond prices and corporate earnings.
Wall Street’s major indices diverged at the close, with the Dow Jones Industrial Average (DIA) climbing 27.57 points, or 0.1%, to 31,521.89.
The broad S&P 500 Index (SPY) of large-cap stocks declined 0.8% to close at 3,876.42.
Meanwhile, the technology-focused Nasdaq Composite Index (QQQ) fell 2.4% to settle at 13,533.05.
A measure of implied volatility known as the CBOE VIX (VXX) rose slightly on Monday and was back to trading above the historical average. The so-called “investor fear index” reached an intraday high of 25.09 on a scale of 1-100, where 20 represents the historical average. It would eventually settle up 4.4% at 23.03.
On the commodities front, U.S. West Texas Intermediate crude futures gained $2.25, or 3.8%, to $61.49 a barrel on the New York Mercantile Exchange. Brent crude, the international futures price, rallied $2.24, or 3.6%, to $65.15 a barrel.
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Precious metals also recovered, with gold futures rising $30.20, or 1.7%, to $1,807.60 a troy ounce. Silver climbed 95 cents, or 3.5%, to $28.24 a troy ounce.
The Final Word: Rising bond yields continued to pressure equity prices on Monday. The 10-year U.S. Treasury yield is currently hovering around one-year highs. So far this month, the benchmark rate has increased by 27 basis points.