Dow tumbles 300 points as bond yields continue rising

Stocks fell on Tuesday, weighed down by another rise in Treasury yield to fresh multiyear highs.

The Dow Jones Industrial Average pulled back 345 points, or 0.7%, reaching session lows. The S&P 500 traded 0.4%, while the Nasdaq Composite fell 0.2%.

Bank stocks led the way lower. Goldman Sachs slid around 1%. JPMorgan Chase, Morgan Stanley and Bank of America also declined. The XLF financials ETF traded lower by about 0.5%.

The 30-year Treasury bond yield climbed to a high of 5.613%, its highest level since June 2002. The benchmark 10-year Treasury note yield traded 4 basis points higher at 5.281%.

The combination of higher oil and yields has put pressure on stocks of late. The Dow fell more than 300 points on Monday, while the S&P 500 and Nasdaq Composite shed 0.8% and 0.9%, respectively.

The 10-year yield is still trading near levels not seen since 2007. The 30-year bond yield, meanwhile, is hovering around a 2004 high.

Still, “We think investors should stay positioned for further equity gains, with diversification at the center of their exposure,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a Tuesday morning note.

“We also continue to rate fixed income as Attractive, and believe investors should calibrate both credit risk and duration to their objective and investment horizons. More income-focused investors may prefer short-maturity bonds to reduce duration risk, while those who can tolerate volatility may consider tactical opportunities in medium- to long-duration high-quality bonds.”