NEW YORK (AP) — U.S. stocks slid Monday after Treasury yields hit their highest levels since the summer and oil prices continued to climb.
The S&P 500 dropped 1%, though it’s still close to its all-time high set a week earlier. The Dow Jones Industrial Average fell 398 points, or 0.9%, coming off its own record, while the Nasdaq composite sank 1.2%.
It’s a stall for U.S. stocks after they rallied to records on relief that interest rates are finally heading back down, now that the Federal Reserve has widened its focus to include keeping the economy humming instead of just fighting high inflation. Friday’s blowout report on U.S. jobs growth raised optimism about the economy and hopes that the Fed can pull off a perfect landing for it.
The stronger-than-expected hiring pushed Goldman Sachs economist David Mericle to say he now sees just a 15% chance of a recession, down from 20%.
But Friday’s jobs report was so strong that it also forced traders to ratchet back forecasts for how much the Fed will ultimately cut interest rates by. That in turn has sent Treasury yields higher, and the 10-year yield is back above 4% for the first time since August.