WASHINGTON (dpa-AFX) - After ending the previous session well off their worst levels but still mostly lower, stocks are seeing further downside during trading on Tuesday. With the downward move, the Dow has fallen to its lowest intraday level in well over a month.
Currently, the major averages are just off their lows of the session. The Dow is down 524.21 points or 1 percent at 51,896.99, the Nasdaq is down 177.82 points or 0.7 percent at 26,008.59 and the S&P 500 is down 37.84 points or 0.5 percent at 7,582.14.
The weakness on Wall Street comes amid a notable increase in treasury yields, with the yield on the benchmark ten-year note jumping back above 5 percent to its highest level since July 2007.
Concerns about the outlook for inflation and interest rates have driven yields higher ahead of the Federal Reserve's monetary policy decision on Wednesday.
The Fed is widely expected to raise interest rates, with CME Group's FedWatch Tool currently indicating a 92.7 percent chance of a quarter point rate hike.
'Market commentators have long argued that Treasuries hitting 5% is the trigger for an equity market correction,' said Dan Coatsworth, head of markets at AJ Bell. 'At this level, investors might wonder what's the point in holding risky equities when they can get 5% on low-risk government bonds.'
He added, 'It is a psychological level and can sometimes act as a warning sign for a market correction rather than be a guaranteed tipping point for equities to slump.'
A continued increase by the price of crude oil is also weighing on Wall Street, as supply concerns continue to drive the price higher amid reports of fresh Houthi strikes on Saudi Arabia.
However, traders seem somewhat reluctant to make more significant moves ahead of the Fed's monetary policy announcement.
Sector News
Airline stocks are seeing significant weakness amid the increase in crude oil prices, with the NYSE Arca Airline Index falling by 1.7 percent to its lowest intraday level in almost four months.
Considerable weakness is also visible among retail stocks, as reflected by the 1.5 percent loss being posted by the Dow Jones U.S. Retail Index.
Brokerage, software and gold stocks also seeing notable weakness, while energy and computer hardware stocks have moved to the upside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday. Japan's Nikkei 225 Index closed just below the unchanged line, while China's Shanghai Composite Index fell by 0.5 percent and Hong Kong's Hang Seng Index slumped by 1 percent.
The major European markets have also moved to the downside on the day. While the German DAX Index is marginally lower, the U.K.'s FTSE 100 Index and the French CAC 40 Index are both down by 0.3 percent.
In the bond market, treasuries are under pressure after turning higher over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.0 basis points at 5.010 percent.
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