/Dow Flounders as U.S. Treasury Yields Resume Plunge

Dow Flounders as U.S. Treasury Yields Resume Plunge

The Dow and broader U.S. stock market traded mixed on Tuesday, as fears of an economic slowdown dulled investors’ appetite for riskier assets. Those fears were well reflected in the bond market as U.S. Treasury yields plunged to their lowest since 2016.

Dow Hovers Near Break-Even

Wall Street’s major indexes struggled to trade in a clear direction on Tuesday, which reflected a tepid pre-market for Dow futures. The Dow Jones Industrial Average slipped 17.07 points, or 0.1%, to 26,700.36.

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Dow Jones Industrial Average edges lower in afternoon trading as trade-war hostilities weigh on investor sentiment. | Source: Yahoo Finance.

The broad S&P 500 Index of large-cap stocks hovered right around break-even and was last seen trading at 2,963.92. Losses were mainly concentrated in energy stocks, while utilities, consumer staples, and communication services reported gains.

The technology-focused Nasdaq Composite Index fell 0.1% to 8,080.24.

Treasury Yields Fall Again

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U.S. Treasury yields extend their free-fall amid heightened economic risks. | Source: AP Photo / Jacquelyn Martin

The yield on the benchmark 10-year Treasury note plunged anew on Tuesday, reaching a low of 1.97%, according to CNBC. The benchmark yield has been hovering at or below 2% for the better part of two weeks as investors continue to pile into government debt amid global growth woes.

Yields and bond prices track inversely with one another.

With the United States and China agreeing to bury the hatchet on their trade war, the Trump administration is now taking the fight to Europe. On Monday, the U.S. Trade Representative’s office released a fairly comprehensive list of European imports that could be subject to tariffs on top of those implemented earlier this year.

The trade dispute between Europe and the United States may seem new, but is actually rooted in a 15-year dispute over aircraft subsidies. President Trump has made it clear he is not afraid to use tariffs as a weapon to bring America’s trade partners back in line.

The United States has opened up multiple fronts in its trade war, with China, Mexico, Canada, India, and Europe all being subject to protectionist rhetoric. The trade-war threat has put the International Monetary Fund and World Bank on high alert, with both organizations slashing their outlook on the global economy.

Click here for a real-time Dow Jones Industrial Average (DJIA) price chart.

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