The Dow Jones Industrial Average could lose up to 400 points today as investors have begun pouring capital out of equity markets and into fixed income positions (bonds).
Here’s why that’s a red flag for the economy.
First, the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
Index Previous Close Point Change Percentage Change Dow Jones 26,279.91 +372.54 +1.44 S&P 500 2,926.32 +42.57 +1.48 Nasdaq 8,016.36 +152.95 +1.95
Now, here’s a closer look at today’s Money Morning insight, the most important market events, and stocks to watch.
The Top Stock Market Stories for Wednesday The United States bond markets are flashing a recession warning yet again. This morning, the 10-year U.S. Treasury bond yield slipped below that of the two-year yield. The so-called inversion of the yield curve has been a fairly reliable indicator of past recessions. The news hit banking stocks as lending firms face a more difficult business environment. Shares of Bank of America Corp. (NYSE: BAC) and Citigroup Inc. (NYSE: C) were both off more than 2% in pre-market hours.
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Although the United States has delayed the implementation of new tariffs on China, concerns about the latter’s economy made headlines this morning. Industrial data from China for July showed that its manufacturing growth increased by just 4.8% compared to the same period last year. That figure was well below economists’ expectations. Meanwhile, investors are questioning why the Trump administration delayed tariffs. The president said that he didn’t want to fuel rising costs of goods during the holiday shopping season. However, the statement contradicts previous statements that argued that China and not American consumers would face the price of rising tariffs. Oil prices dropped