Stocks fell on Wednesday, tracking bond yields, as worries over a possible economic slowdown lingered.
Dow Jones Industrial Average traded 66 points lower and briefly fell more than 200 points. The S&P 500 and Nasdaq Composite declined 0.4 percent and 0.6 percent, respectively.
Earlier in the day, the major averages traded higher on better-than-expected trade data. The U.S. trade deficit fell to $51.15 billion in January, much more than was expected and could give a boost to this quarter’s GDP.
Health care, utilities and tech were the worst-performing sectors, falling more than half a percent. Abiomed and Advanced Micro Devices were among the worst-performing stocks in the S&P 500, sliding more than 3.5 percent each.
The benchmark 10-year rate traded at 2.365 percent and hit its lowest level since late 2017. Investors are keeping an eye on rates after the 10-year fell below the 3-month rate last week for the first time since 2007. It is a development that investors call an inverted yield curve and is seen as an early indicator of a recession.
The U.S. Treasury yield curve has inverted before each recession in the past 50 years and has only offered a false signal just once in that time, according to data from Reuters.
“All eyes are going to be on the Treasury market,” said Michael Reynolds, investment strategy officer at Glenmede. “We are seeing a rising probability of recession in recognition of these rising risks, but we’re not blowing off the top just yet.”
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