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Treasury market comes under fire as September bond supply gives investors choices

1. Treasury market face selloff amid increased corporate-bond issuance in September. 2. September's issuance expected to reach $150-$180 billion, pressuring yields. 3. 30-year Treasury yield nearing 5% impacts U.S. stock market negatively. 4. S&P 500 index fell 0.7%, its worst day since August 1. 5. Investor uncertainty surrounds tariffs, inflation, and Fed's independence.

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FAQ

Why Bearish?

The increase in bond yields due to ample supply generally drives stock prices down, as seen during similar scenarios in 2018 and 2021. The S&P 500's reaction further confirms negative sentiment.

How important is it?

The article highlights significant bond market dynamics that can directly affect equity markets like SPY, suggesting a substantial impact potential.

Why Short Term?

Immediate impact is observed with stock declines following bond yield rises, but long-term developments depend on economic conditions and Fed policies.

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