The Dow Jones Industrial Average experienced its steepest decline of the year, dropping 1.19% as inflation concerns and rising bond yields weighed heavily on investor sentiment. The S&P 500 fell 1.52%, while the Nasdaq Composite dropped 1.74%. The Russell 2000 declined 1.6%, reflecting broad market weakness across major indices.
Jim Cramer of CNBC’s “Mad Money” attributed the sell-off to persistent inflation fears and climbing bond rates, particularly noting the 30-year Treasury yield surpassing 5.2%—its highest level since 2007. The industrials sector was hit hardest, falling 3.24%, while energy, consumer staples, and communications services managed modest gains.
Bond market expert Jeffrey Gundlach appeared on “Closing Bell” to discuss Federal Reserve policy, stating that achieving the 2% inflation target may require further rate hikes and could take years. Current Treasury yields include 5.21% for the 30-year bond, 4.69% for the 10-year note, and 4.26% for the 2-year note.
Investors are bracing for key economic releases at 8:30 a.m. ET, including initial jobless claims (consensus: 200,000), Q2 GDP growth (expected: 1.8%), and the Personal Consumption Expenditures price index. Prediction markets show 54% of participants expect jobless claims to exceed estimates.
Earnings season continues with notable reports after the bell. Amazon, Apple, and Coinbase will present their quarterly results on “Closing Bell: Overtime,” with implied volatilities ranging from 3.5% to 8%. Hershey’s quarterly report is scheduled for 7 a.m. ET before the market open.
Internationally, the Bank of England and Bank of Japan will announce monetary policy decisions, with the former at 7 a.m. ET and the latter at 10 p.m. ET. The iShares MSCI United Kingdom ETF remains near February highs, while Japanese markets have retreated 8.4% from recent peaks.
In corporate news, Robinhood reported strong earnings driven by options trading and crypto activity, with shares rising 40% since April despite a 4% after-hours dip. Meta Platforms fell 7% in extended trading following disappointing guidance, while Microsoft gained 8% after beating earnings expectations, particularly in its Azure cloud business.