Stocks Slide as Bond Market Signals Rising Concern About Growth

Stocks Slide as Bond Market Signals Rising Concern About Growth

Stocks dropped on Wednesday as the bond market signaled rising concern about the economy and data from Germany and China suggested that the global industrial economy was falling into a deepening slump.

On Wall Street, the S&P 500 fell more than 2 percent, led by a steep drop in the energy sector. Retail shares also fell sharply, after Macy’s posted lower quarterly results. Shares of large technology companies, sensitive to the outlook for the trade war, also fell.

Amid an increasingly volatile environment for investors, the market drop reflected a rapid shift in sentiment, erasing Tuesday’s gain in the S&P 500, which had been driven by the White House decision to narrow the scope of the next round of tariffs on China.

Any optimism quickly dissipated on Wednesday as investors appeared intensely attuned to downbeat economic signals being sent by the bond market. Yields on long-term United States securities continue to plumb lows not seen in recent years. The yield on the benchmark 10-year Treasury note fell below 1.60 percent, a level it last reached in late 2016. The yield on the 30-year bond fell below 2.05 percent, putting it on pace to close at the lowest level on record.

The signs of economic weakness in those important industrial economies hit commodities markets. Futures prices for American crude oil fell 4 percent. Prices for copper, often tightly tied to the outlook for Chinese economic growth, fell more than 1 percent in New York trading.

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