NEW YORK (Reuters) – Yields on benchmark U.S. government bonds rose on Thursday to their highest in about seven years, pushing the U.S. dollar to a four-month peak against the yen, while oil prices topped $80 a barrel for the first time since November 2014 before pulling back.
FILE PHOTO: A panel displays a list of top active securities outside the Hong Kong Exchanges in Hong Kong, China February 28, 2018. REUTERS/Bobby Yip/File Photo
Wall Street’s main stock indexes fell, while European stock markets climbed and Britain’s FTSE 100 notched a record closing high.
The focus this week has centered on rising U.S. Treasury yields, as investors point to data reflecting a strong U.S. economy that could indicate firming inflation.
The benchmark 10-year U.S. Treasury note yield hovered above 3.1 percent, continuing a surge higher earlier in the week.
“I think it’s the same thing we have had really for the past couple of weeks: The inflation trade is being put on,” said Walter Todd, chief investment officer at Greenwood Capital in Greenwood, South Carolina.
Looking at the rise in bond rates, the dollar and oil, Todd said, “all that is being driven by the same backdrop, which is the U.S. economy is hitting on all cylinders.”
On Wall Street, the Dow Jones Industrial Average fell 117.14 points, or 0.47 percent, to 24,651.79, the S&P 500 lost 10.11 points, or 0.37 percent, to 2,712.35 and the Nasdaq Composite dropped 43.17 points, or 0.58 percent, to 7,355.12.
Shares of retailer Walmart and network gear maker Cisco fell after their respective results, weighing on indexes. Energy shares rose 0.9 percent, bolstered by higher oil prices.
Investors were also watching trade developments between the United States and China, as the two countries launched a second round of talks to