US stocks closed lower on Thursday as rising Treasury yields pressured equities, while higher oil prices and a sharp decline in Walmart shares added to investor concerns.
The Dow Jones Industrial Average fell more than 1%, while the S&P 500 and Nasdaq Composite also declined.
Rising Treasury yields pressure stocks
The Dow Jones Industrial Average dropped 703 points, or 1.32%, to 52,759. The S&P 500 fell 0.87%, while the Nasdaq Composite declined 1%.
The declines came a day after the Treasury Department announced plans to more than double its longer-term debt buybacks, initially targeting at least $4 billion of purchases of 10-, 20- and 30-year bonds.
The move had briefly eased pressure in the bond market, but Treasury yields resumed their upward trend on Thursday.
The 10-year Treasury yield rose more than five basis points to 4.706%, while the 30-year yield increased by more than five basis points to 5.251%.
The renewed rise in borrowing costs raised concerns about the ability of the Treasury’s buyback program to provide sustained relief to the bond market.
Higher yields can also put pressure on equities by increasing the relative attractiveness of fixed-income assets and raising financing costs.
The 30-year Treasury yield had reached its highest level in nearly 20 years earlier this week.
Oil prices add to inflation concerns
Rising oil prices provided another source of pressure for investors. West Texas Intermediate crude for October delivery gained about 2% to trade above $86 a barrel, while Brent crude rose about 2% to above $93.
Oil prices advanced for a fifth consecutive session as tensions between the United States and Iran remained elevated and efforts to resolve the conflict stalled.
The increase in crude prices added to concerns about inflation and consumer spending, particularly after recent economic data pointed to weaker retail sales and labor-market conditions in July.
Energy stocks benefited from the increase in oil prices, with the S&P 500 energy index among the sectors that outperformed.
However, companies sensitive to fuel costs, including cruise operators Royal Caribbean Group and Carnival, came under pressure.
The rise in energy costs also contributed to concerns about the resilience of US consumers as gasoline prices remain elevated.
Walmart selloff weighs on broader market
Walmart shares fell sharply after the retailer reported weaker-than-expected US comparable sales and provided a softer outlook for the third quarter. The stock dropped about 9%, in its worst session in more than four years.
The decline weighed on the broader consumer sectors, with retailers including Costco, Dollar Tree and Albertsons also falling.
Other individual stocks moved sharply on company-specific developments. Moderna gave up much of its gains from Wednesday, when the biotechnology company surged nearly 177%.
Deere shares rose after the farm-equipment manufacturer raised the lower end of its full-year net income forecast.
Coty shares declined after the CoverGirl owner projected current-quarter earnings below expectations and withheld its annual outlook.
Advance Auto Parts also fell after issuing a weaker annual sales forecast.
Meanwhile, cryptocurrency-related stocks including Strategy and Coinbase gained after President Donald Trump called on Congress to advance cryptocurrency legislation.
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