Dow slides 400 points as rates jump, international crude price tops $101

Stocks fell on Wednesday as rising Treasury yields and oil prices continued to rattle investors.

The Dow Jones Industrial Average dropped 411 points, or 0.8%. The S&P 500 shed 0.5%, while the Nasdaq Composite fell 0.7%.

Treasury yields jumped on Wednesday after the Treasury Department said it’s going to triple its buyback operation of longer-dated government debt to $6 billion. The move follows the Treasury Department’s announcement last month that it’s going to at least double the level of government debt buybacks.

Following the announcement, the 10-year Treasury note yield rose to 4.857%, reaching its highest level since November 2023. The yield had briefly climbed above the closely watched 4.8% level on Tuesday as rising oil prices added to concerns about inflation.

Even with the increased buyback plan, yields advanced because some on Wall Street anticipated even bigger repurchases by Treasury Secretary Scott Bessent. Peter Boockvar of The Boock Report said some thought the buyback would be as high as $7 billion or $8 billion.

While equities were under pressure Wednesday, Thomas Martin of Globalt Investments noted that the market has “held up” despite fears around higher oil prices and rates, adding that it hasn’t experienced a correction since earlier this year.

“You look at equity sentiment, and it’s at an extreme. At the same time, the sentiment for higher interest rates is also at an extreme,” the firm’s senior portfolio manager said. “Those two things shouldn’t be able to live together for very long.”

Also weighing on sentiment, oil prices rose yet again as escalating tensions between the U.S. and Iran fuel concerns over further disruptions to Middle East energy supplies. Futures for Brent crude, the international benchmark, added about 3% to trade above $101 a barrel for the first time since July. U.S. West Texas Intermediate futures gained 3% as well to above $96.