Stocks suffered a drop this Thursday, coinciding with the drop in Treasury yields in response to the release of new inflation data. Traders are evidently already feeling panic. Dow Jones technical analysis has already shown a significant shift.
The Dow Jones Index fell by over 0.50%, a little more than 150 points. Those who want to invest in Dow Jones may want to wait. Meanwhile, the S&P 500 lowered by 0.62%, with the Nasdaq lowering by 0.63%. All of these indices were previously enjoying a major boost for 4 consecutive days. It seems like this bull run is over. If we look at the 10-year Treasury yields, we can see a rise over 4.70%. Meanwhile, 2-year Treasury yields rose up over 5.06%.
Yields generally reached record highs recently, at their highest points in 16 years, with 10-year yields being at 4.70%. Analysts and investors believe that these high numbers will likely stay on, which impacted stock performance this Thursday.
This was all in response, as we suggested, to new inflation data. This is the most likely reason for our Dow Jones technical analysis.
Unsettling CPI Data Suggests Prolonged Inflation Challenge
Investors had been hoping for a long time that we would be able to finally lower inflation down to 2.00%. However, recent CPI data seems to dash any hopes of this occurring. Traders seem to finally be coming to terms with this reality. Bond markets seem to be the area that has stuck this belief most stubbornly, but analysts believe they will eventually give way as well. This will mean Treasury yields are likely to meet even greater record highs in the coming weeks and months.
The CPI data from Thursday showed the rate to increase by 0.40% over the last month. It also shows an increase of 3.70% from this time last year. This is a little higher than the expectations for the Dow Jones, which were at 0.30% and 3.60%. So, the price index numbers have exceeded expectations so far. We will have to see the weekend Dow performance.
