Stock market news for October 23, 2024

Stocks fell sharply on Wednesday, with the Dow Jones Industrial Average posting its worst day in more than a month, as higher Treasury yields weighed on market sentiment.

The S&P 500 lost 0.92%, closing at 5,797.42. The 30-stock Dow plunged 409.94 points, or 0.96%, ending the day’s session at 42,514.95. It was the worst day since early September for the blue-chip index. The Nasdaq Composite lost 1.6%, ending at 18,276.65.

Both the Dow and S&P 500 notched their third straight losing session.

At its session high, the benchmark 10-year Treasury yield topped 4.25%, reaching its highest level since July 26.

Treasury yields have been soaring over the past month, even after the Federal Reserve began cutting interest rates in September. Some have pointed to recent economic data as a source for the move higher, while others have noted the potential of growing fiscal deficits in the U.S. under a second Donald Trump presidency.

“To me, it’s all about the impact of higher rates. The market is repricing the probability that the Fed can aggressively cut rates,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management. “There have been parts of the economy that haven’t felt the impact of rising interest rates yet, but the longer rates remain higher, the more different parts of the economy have to reprice to that reality … the economy is out of equilibrium.”

The most overvalued part of the U.S. equity market is large caps, Schutte said, adding that he believes the market is due for a pullback in the near term as recession risks linger.

Megacap stocks were under pressure Wednesday, with Apple and Nvidia shares losing more than 2%. Meta Platforms slid 3%, while Netflix and Amazon were lower by roughly 2%.

Dow member McDonald’s closed more than 5% lower. The Centers for Disease Control and Prevention said late Tuesday that an E. coli outbreak tied to the fast-food giant’s Quarter Pounder burgers has resulted in 10 hospitalizations and one death.